Treasury Secretary Timothy Geithner(Photo: Haraz N. Ghanbari, AP)
While you were partying on New Year's Eve, the U.S. hit its debt
ceiling -- setting up the next big budget battle in the first two months
In a letter to Congress on Monday, Treasury Secretary Timothy Geithner
said he has begun a "debt issuance suspension period," using
"extraordinary" borrowing measures to make sure the government avoids
exceeding its debt limit of $16.394 trillion.
But the debt
issuance suspension period would last only through Feb. 28 -- and
congressional action would be needed in the interim to increase the debt
And the "fiscal cliff" deal struck between the White House and Congress does not address the debt ceiling.
Obama and House Republicans clashed over the debt limit in the summer
of 2011, leading to a near-default on the government's obligations and a
downgrade of the nation's credit rating.
Expect more arguing about taxes, spending cuts, and debt in the weeks ahead.
taking those steps, Treasury can buy about $200 billion of headroom.
That normally can cover about two months' worth of borrowing, although
continuing uncertainty about tax rates and spending make it hard to
determine precisely how long the extraordinary measures will last.
"The bottom line: Congress will have to raise the debt ceiling soon -- as soon as late February.
that sets the stage for yet another fight on Capitol Hill, where some
Republican lawmakers view the debt limit as leverage in negotiations
with President Obama over spending cuts and reforms to Medicare and