U.S. Will Hit Debt Limit No Later Than May 16, Geithner Says

The United States will hit the legal limit on its ability to borrow no later than May 16, Treasury Secretary Timothy Geithner said on Monday, ramping up the pressure on Congress to act to avoid a default.

Previously, the Treasury had warned that the country could hit the $14.294 trillion statutory debt limit between April 15 and May 31.

In a letter to U.S. Senate Majority Leader Harry Reid, Geithner said that while the projections could change, the Obama administration does not believe they could change in a way that would give Congress more time to raise the debt ceiling.

Geithner's warning comes as Republican and Democratic lawmakers struggle to complete a spending package that would keep the government operating beyond Friday. Republicans want to use that bill to cut spending more deeply than Democrats.

If the debt ceiling is not increased by May 16, Geithner said the Treasury has authority to take certain extraordinary measures to temporarily postpone the date the United States would default on its obligations.

However, those actions would be exhausted after about eight weeks and there would be "no headroom" to borrow within the limit after July 8, he said.

(Reporting by Rachelle Younglai; Editing by Dan Grebler)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[PinaColada]

01:07 AM on 04/06/2011

Geither is the bank's eyes into the White House. What Geither knows about Obama is surely passed on to the people at the FRB. What if Obama is pondering about not borrowing from the FRB any longer but is contemplating to authorize the US government to restart the printing of U.S. Notes? What a storm that would be?

[lvdragonlady]

12:07 AM on 04/06/2011

IF corporations(GE, Chase etc) and the wealth, would pay their FAIR share of taxes like the rest of us, America would NOT be in this situation.

[muck-raker]

08:18 PM on 04/05/2011

ALL US legislators need to take a PAY HOLIDAY.....just do it

http://www.youtube.com/watch?v=yipV_pK6HXw&feature=relmfu

[lvdragonlady]

12:08 AM on 04/06/2011

Pay holiday, nope, I say they take a 2/3rd pay cut until America gets back on her feet.
They do not do enough work for the money they are currently making.

[Jimmy Boy]

03:40 PM on 04/05/2011

At some point we will go bankrupt. That will happen sooner than latter.

[GorgyPorgy]

11:59 AM on 04/05/2011

Things might be better if we could get these deadbeat tax cheats to pay up, Timmy.

[mike dougles]

02:26 PM on 04/05/2011

Hey Timmy is a Dem so its ok to be a tax cheat.

[lvdragonlady]

12:10 AM on 04/06/2011

Tax cheats come in all shapes, sizes and political associations.
BUT the GOP shows America that they are all about help the corporations by giving them TAX breaks, I say we ask them WHY????
IF corporations get tax breaks, they can NOT contribute to ANY political party.
How do you like them apples??? :-)

[blackranger]

11:52 AM on 04/05/2011

When are Americans going to realize they were better off when taxes were HIGHER

[Batland]

12:43 PM on 04/05/2011

The idea of tax cuts are to tempting. Its all American to be greedy with everything; it's status in our society.

[maxhardon]

11:16 AM on 04/05/2011

Wanna bet these tea party whiners runnin around talkin about how the poor and the middle class have to make some sacrificies will cave in and vote for raising the debt ceiling?

[GorgyPorgy]

12:05 PM on 04/05/2011

How much you want to bet you are drowning in debt?

[mike dougles]

02:28 PM on 04/05/2011

Sadly the debt cieling does need to be raised and it will be.

This problem is you have a guy in the WH who used to think raising the debt ceiling was a bad idea. Funny how thing change.

[maxhardon]

11:00 AM on 04/05/2011

When are the good people of this country of ours going to get off their b*tts and run these crook bankers out of the country?

[Debbie McPherson]

02:14 PM on 04/05/2011

max
 
kkinda hard to do when these banksters own our politicians....

[ScarlettMocha]

10:39 AM on 04/05/2011

Timothy is lucky his position is appointed and not voted. Otherwise . . .

[concerned21 2]

10:36 AM on 04/05/2011

what are the "extraodinary" measures that may be taken so there is not a default?

[Julie L Reid]

10:30 AM on 04/05/2011

Pull your heads out of the sand. There is a debt limit. We will reach it. We can hardly pay the interest. All of our wealth is in the hands of the few who are not letting go at the expense of the country that allowed them to make it. We are losing our grip on the national currency. Cutting funds for poor for the rich will only result in chaos. It will be like the French Revolution. Welcome to the United States of China. I hope I am wrong, but where is the magic bullet? Congress won't do anything that will effectively turn this around. People in Milwaukee can't get to work because of bus cuts, it's a vicious circle.

[ChaiKat]

11:41 AM on 04/05/2011

Amen. Nobody with money wants to let go of it. The rich get richer living off the backs of the poor and disappearing middle class. Here's a thought, how about they cut the budget by slashing some salaries, maybe cutting back on their own health care. And hey, maybe making those who have profited from bailouts and tax breaks pay up? Instead they keep taking money from those that don't have any more to give.

[Autodidactic American]

11:55 AM on 04/05/2011

Yes there is a debt limit, but it's, of course, arbitrarily imposed by Congress. It has nothing to do with the actual economic stability of the country... just another distraction that "deficit hawks" use to push through ulterior motives that just happen to benefit their tax bracket.

And, as always, it will just waste more of the Congress's time when Tea Party-ers argue against raising it...

[YoBear]

10:14 AM on 04/05/2011

Boehner and his buddies are relishing a shutdown. Imagine the salivating CEOs ready to milk the system when all the regulatory people in the government stop working.

[SwimUpstream]

10:59 AM on 04/05/2011

The only reason that we are facing a shutdown is because LAST YEAR'S Congress failed to pass a budget.

[Debbie McPherson]

02:17 PM on 04/05/2011

Swim
 
that was back when the dems owned both house and senate, right?
 
funny how they let everything slide until they had GOP opposition----looks all orchestrated to me....like the tax cuts for the rich ----
 
whatever they are up to ---you better believe it'll stink....

[maxhardon]

10:05 AM on 04/05/2011

This little crook cheat banker boy is trying to scare us into a dollar crash so he and his buddies at the hedge funds an make a killing going short on the dollar.

[YoBear]

10:15 AM on 04/05/2011

Scary and true.

[ScarlettMocha]

10:31 AM on 04/05/2011

does sound eerily like the fear factor we credit to the republicans

[KarateKid]

09:23 AM on 04/05/2011

The boy hath cried "wolf !!" too many times. Don't tell us we're broke, because we're not. If we can afford to have troops all over the world, if we can afford to drop over 200 Tomahawk missiles on Libya at $750,000 apiece, approximately $170 million just for the missiles ALONE, we have money.

We continue to spend billions each month in Iraq and Afghanistan, with no end in sight.

So, please, Tim, don't bother us with more _BS about our dire financial situation. End our foreign excursions and watch the country get more healthy, not to mention lessen the h8red toward us and make the world safer.

We're spending billions to make the world less safe. What sense does this make?

[maxhardon]

10:03 AM on 04/05/2011

f + f. you are right on the money.

[ScarlettMocha]

10:32 AM on 04/05/2011

Exactly! F&F

[barbra1971]

09:20 AM on 04/05/2011

I wonder what are they up to? What is the final outcome?

[maxhardon]

10:04 AM on 04/05/2011

I suspect a couple of Tommy's buddies at the hedge funds are going short on the dollar, so he's trying to crash out the dollar so they can make a killing. Can't think of any ohter reason for his BS story.

[YoBear]

10:19 AM on 04/05/2011

Seriously you should invest a chunk of assets in metals and foreign stocks. China is the rising power. They focus on power and sovereignty. Greed is secondary to them.