US to hit debt ceiling on New Year’s Eve: US Treasury Secretary
US Treasury Secretary Timothy Geithner
Thu Dec 27, 2012 2:48AM GMT
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US Treasury Secretary Timothy Geithner has warned that the US government’s borrowing will reach its debt limit on New Year's Eve.
On Wednesday, Geithner said in a letter to Congress that on December 31 the government will reach its statutory 16.39-trillion-dollar debt limit, which is a ceiling imposed by Congress, AFP reported.
"I am writing to inform you that the statutory debt limit will be reached on December 31, 2012," Geithner said in the letter, adding that the Treasury Department will soon take “extraordinary measures” to stave off default.
“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," Geithner said.
He noted that the measures, including suspending the sale of some Treasury securities, are expected to create “$200 billion in headroom,” which would buy a couple months' time under normal circumstances.
“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," Geithner pointed out.
Secretary Geithner also warned that if the White House and US lawmakers fail to reach a deal on the so-called fiscal cliff, also due on December 31, he could not be sure when the money would dry up.
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