As the federal government hit its debt limit of $14.3 trillion Monday, Pennsylvania Sen. Pat Toomey said the Obama administration must accept substantial spending cuts to win congressional approval to borrow more money.

The Treasury Department began shuffling funds around, including stopping payments into pension accounts, and Secretary Tim Geithner said that such stopgap measures would last until Aug 2. If congressional leaders can't reach a deal on raising the debt ceiling by then, the United States will default on its debt, Geithner said.

Toomey, a Republican and former investment banker, said such warnings were "scare tactics," adding that a failure to raise the debt limit would be disruptive, but not catastrophic. The White House has said it wants Congress to bump up the limit without preconditions.

The situation is "like the family that is routinely spending more than their income and making up the difference running up credit cards - and when they reach the limit on their last credit card, the White House position is, 'Throw another credit card at them,' " Toomey said in a luncheon speech to the Philadelphia chapter of the Federalist Society, an organization of conservative lawyers.

"My own view is, it's time for an intervention," he said.

A year's worth of federal tax revenue is more than 10 times the government's annual payments on its debt, Toomey said, so the nation would be able to avert default by making a priority of spending to pay interest on its debt first. In February, Toomey introduced the Full Faith and Credit Act, a bill that would require such an approach when the debt limit was exceeded.

Administration officials argue that not increasing the debt limit could spook the bond markets by feeding fears that the political system would not be able to come to an agreement. That could lead to higher interest rates rippling through the economy, possibly triggering a second recession, they argue.

"We need to have a vote to lift the debt ceiling, because the consequences of not doing so would be quite serious indeed," White House press secretary Jay Carney said Monday. "And those who suggest otherwise are whistling past the graveyard."

Vice President Biden has been leading negotiations with congressional leaders from both parties and the White House on spending cuts that would be tied to an increase in the borrowing limit. One complication: Democrats say that ending the Bush tax cuts for the top 2 percent of taxpayers should be on the table; GOP negotiators say no way.

"Instead of the scare tactics, they ought to be discussing the kind of reforms we can make to get on a sustainable fiscal path," Toomey said after his speech at the Blank Rome law firm's offices in Logan Square.

He favors a statutory cap on overall federal spending in the future as a condition for approving a debt-limit increase - an approach that House Speaker John Boehner has suggested as well. Spending cuts, Boehner said in a statement Monday, must be "greater than any increase in the debt limit."

Contact politics writer Thomas Fitzgerald at 215-854-2718 or tfitzgerald@phillynews.com.