Treasury vows fight to avert default
U.S. to reach debt ceiling on Monday
The U.S. government will hit the $16.4 trillion federal debt limit Monday and turn to “extraordinary measures” to continue borrowing, the Treasury Department said yesterday, beginning a countdown until Congress either passes legislation to allow for more borrowing or the government defaults on its debt.
In a letter to Congress, Treasury Secretary Timothy Geithner said that although the debt ceiling would be reached Dec. 31, the government could buy roughly two months’ more time before it would be unable to meet all its obligations.
The debate over the debt ceiling is likely to be another flash point in the capital’s tumultuous negotiations over taxes and spending.
President Obama has demanded that the debt limit be taken off the table as a negotiating point, but Republicans say it is an important piece of leverage needed to force spending cuts and restrain the growth of government. It was the debt-limit debate in the summer of 2011, when the nation came within days of default.