"If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully," the CBO report said. "As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both." CBO Director Phillip Swagel attributed the rise to higher interest rates that particularly are hitting the housing industry, coupled with slowing business investment. REUTERS/Elizabeth FrantzRepublicans, who control the House of Representatives, want to withhold a debt limit increase until Democrats agree to deep spending cuts. Democrats in turn say the debt limit should not be "held hostage" to Republican tactics over federal spending.

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