Treasury Secretary Timothy F. Geithner said his department will take “extraordinary measures” to postpone a U.S. default for about two months while President Barack Obama and Congress work out a deficit-reduction deal.
Geithner, in a letter to congressional leaders today, said the government will hit its statutory debt ceiling on Dec. 31. To avert a default, the Treasury will take action to create about US$200-billion in headroom under the debt limit.
“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 said.
Geithner’s letter adds urgency to talks between Obama and congressional Republicans on a deficit-reduction plan. Obama has asked that raising the debt ceiling be part of that plan.
Given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is…
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