Geithner Warns on Debt Limit; Will Take 'Extraordinary Measures' to Buy Time

December 26, 2012 5:23 PM EST
As if the fiscal cliff wasn't enough stress for lawmakers, there appears to be another kink in the works.

Treasury Secretary Tim Geithner sent a letter to Congress stating that the U.S. would hit its $16.394 trillion borrowing limit on Monday. There may be a series of steps that would buy the U.S. government a little more time, but only a few months at best.

The hard debt limit nearing wasn't a sneak attack; the Obama administration and congressional Republicans butted-heads in 2011 over a possible resolution, only to have Standard & Poor's strip the U.S. of its top-notch rating.

Extraordinary measures that U.S. Treasury can take will offer a $200 billion buffer, which would normally last two months. Geithner noted that "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."

U.S. markets ended lower on the session today as fiscal cliff talks are set to resume tomorrow.

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