The Obama administration on Thursday told Congress the government is about to hit the $14.3 trillion debt ceiling and will need authority to borrow more, kicking off the first major test of spending restraint and the strength of Republicans' new congressional power.

Republicans said they won't agree to a higher debt limit unless Democrats agree to strict new spending controls. Democrats warned the GOP not "to play chicken" with the economy and said hitting the limit could be worse than the financial collapse of 2008.

"Never in our history has Congress failed to increase the debt limit when necessary," Treasury Secretary Timothy F. Geithner said in a letter to Congress. "Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs"...