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Congress warned today that U.S. debt limit of $16.4 trillion will be reached on December 31st


This news story was published on December 26, 2012.
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U.S. capitol

WASHINGTON, D.C. – United States Treasury secretary Timothy Geithner warned Congress on Wednesday he would have to take “extraordinary measures” to avoid a default on the country’s debt as it is set to reach its $16.4 debt ceiling.

Geithner told Congress that the Treasury could raise $200 billion to fund government spending as an emergency measure.

Here is the letter Geithner wrote to Congress:

I am writing to inform you that the statutory debt limit will be reached on December 31, 2012, and to notify you that the Treasury Department will shortly begin taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations.

These extraordinary measures, which are explained in detail in an appendix to this letter, can create approximately $200 billion in headroom under the debt limit.  Under normal circumstances, that amount of headroom would last approximately two months.  However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures.  At this time, the extent to which the upcoming tax filing season will be delayed as a result of these unresolved policy questions is also uncertain.  If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures.  Treasury will provide more guidance regarding the expected duration of these measures when the policy outlook becomes clearer.

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10 Responses to Congress warned today that U.S. debt limit of $16.4 trillion will be reached on December 31st

  1. Avatar

    John Reply Report comment

    December 29, 2012 at 9:52 pm

    This is the best card the Republicans have in their hand right now. They can say, if you don’t cut spending, there is no deal on the debt ceiling, end of story.

  2. Avatar

    4ever49 Reply Report comment

    December 27, 2012 at 2:25 pm

    This is one sure way to reduce spending.

  3. Avatar

    Anonymouse Reply Report comment

    December 26, 2012 at 9:48 pm

    Let it go by without acting on it, no continuing resolutions or extensions. 95% of the people in the USA wouldn’t even notice the government being not open for business.

    • Avatar

      Anonymous Reply Report comment

      December 27, 2012 at 8:26 am

      You should really look around and see what government does from day to day.

      • Avatar

        Anonymouse Reply Report comment

        December 27, 2012 at 10:28 am

        It does nothing for me.

      • Avatar

        Anonymous Reply Report comment

        December 27, 2012 at 11:20 am

        Certainly didn’t educate you. That’s for sure.

      • Avatar

        LVS Reply Report comment

        December 27, 2012 at 11:40 am

        @Anonymous-just how many are you peole hiding behind Anonymous? It makes it hard to carry on any kind of a conversation with you because we never know who we are talking to. Why don’t you try something original?

    • Avatar

      Katie Reply Report comment

      December 27, 2012 at 12:40 pm

      47% of the people wouldn’t be able to do anything without the government because they would have no money. The rest of us support them.

  4. Avatar

    Dave Reply Report comment

    December 26, 2012 at 7:55 pm

    Obama is to blame for our country being in debt and then he took another vacation go figure !