Treasury: Debt Limit Will Need To Rise About About $2 Trillion

WASHINGTON (Richard Cowan and Rachelle Younglai) - The Treasury has told lawmakers a roughly $2 trillion rise in the legal limit on federal debt would be needed to ensure the government can keep borrowing through the 2012 presidential election, sources with knowledge of the discussions said.

Obama administration officials have repeatedly said that it is up to Congress to decide by how much the $14.3 trillion debt limit should be raised.

But when lawmakers asked how much of an increase would be needed to meet the government's obligations into early 2013, Treasury officials floated the $2 trillion working figure, Senate and administration sources told Reuters.

Former Treasury officials have said it is routine for Congress to ask the Treasury Department for guidance. Republican leaders have asked the White House to provide the size of any proposed increase before the two sides sit down on Thursday to discuss the debt limit face-to-face.

"We have not specified an amount or a time frame. We think that should be left up to Congress," Mary Miller, Treasury's assistant secretary for financial markets, told reporters on Wednesday.

She also said it would be better to raise the debt ceiling enough so that the government does not bump up against it so frequently.

"Obviously, a longer period of time between these activities would be beneficial in terms of the work that goes into preparing for a debt limit increase. But again, you know that's not the Treasury's call," she said.

A Reuters analysis of Treasury's borrowing needs forecast Congress would have to raise the debt ceiling by more than $2 trillion to get through next year's election without having to revisit the issue. According to the Treasury, the government borrows on average about $125 billion per month.

(Reporting by Richard Cowan, Rachelle Younglai, David Lawder; Editing by Andrea Ricci)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[leorangerie]

01:47 AM on 05/06/2011

Stick a 'for sale' sign on all the National Parks.

[irochfpst]

10:28 PM on 05/05/2011

raising the debt ceiling is a really bad move. increase taxes on the rich, closing tax loopholes, eliminating subsidies, and forcing corporations to pay their fair share of taxes would be some of the right things to do. unfortunately, corrupt people cannot bring themselves to do what is right. they care little about the consequence to hard working taxpayers. what is it going to take for people to realize that the people they are electing to office are corrupted by ground rules put in place by those whose aim is to get things the way they like it.

[fatnugly]

08:25 PM on 05/05/2011

That's great news so treasury thinks the deficit will shrink by at least 500 billion. Who knows maybe they can get it down even lower.

[ectullis]

06:34 PM on 05/05/2011

Get rid of Obsama et al.

[SAHD-Rydawi]

05:42 PM on 05/05/2011

Be warned, raising the debt ceiling will further devalue the dollar. Get your money out of the doomed currency and get precious metals. Gold is too expensive for us poor folk to own but you can get silver EXTREMELY cheap and easily. I figured out a way to get it at coin face-value.
http://findpreciousmetals.blogspot.com

[frank day]

08:34 AM on 05/05/2011

So, just about what it costs to fund the MIC for 2 years.

[atomic]

11:56 PM on 05/04/2011

The system is failing ... the empire is falling ... the rich are funneling the money to themselves. Like a ship about to sink the rich have their life boats and have already forgotten about the rest of us.

[Sundialsvc4]

11:35 PM on 05/04/2011

Am I the only person out here who thinks that you may as well ==unplug== that dumb sign?

A nation of 311 million people -cannot- "run out of money." We don't create Governments in order to, umm, "run out of" money.

If you are a sovereign government, then you can print as much of the stuff as you care to. "At your own risk, of course," because your powers to print money extend only to your own borders.

And here, I think, has been the problem. Three closely-related problems, really ...

(a) We tried to extend "our money" beyond "our borders." We tried to say that every human being on this planet must accept The United States Dollar, one-on-one with their own currency. They must accept The United States Dollar in exchange for their own trade-goods even though they are receiving no trade-goods in return. "No, they do not."

(b) We decided that the only way that our Government can actually get money, is to "borrow it." And that's why we have that stupendous number up there. But it's just a fake, because we've also decided that "we can always 'borrow' more." And so we can.

(c) But if you're going to "borrow," who do you borrow FROM? From your own banks, of course. These folks take free money from your "magic reserve," use it to "buy" your "securities," and off they go. BUT: they call it "profit!"

[MikeyJaii]

10:42 PM on 05/04/2011

Money we don't have.

[frank day]

08:35 AM on 05/05/2011

thus the word 'deficit'

[Reno Fickler]

09:54 PM on 05/04/2011

They have to allow for the buget of $3.8 trillion plus the projected $1.2 trillion deficit spending.
With the high unemployment, revenues are down in both income tax and Social Securty.
I don't think we are in Kansas anymore, Toto.
(If you can check what I posted on HP two weeks ago, I wrote the govt would have to increase the debt limit 2 trillion)

[frank day]

08:36 AM on 05/05/2011

Yeah. Sure I'll check later.

[dtallwalk]

09:38 PM on 05/04/2011

Washington knows the debt ceiling has to be raised. That said how hard would it
Be for these guy to take the next step and vote for the balanced budget bill so
We do not have to go thru this every year. Don’t we have more important things?
We should be doing. Like getting the US back to work and begin make the US
A place that our kids can say if I work hard and get a higher education I will
Have a life equal to my parents. not like now where the kid’s do not hold this
Mind set at all. Shame on Washington DC

[jflorish]

09:16 PM on 05/04/2011

Raise the debt limit, then in another year or two be prepared to raise it another 2 trillion.

[KIampfbeobachter]

07:40 PM on 05/04/2011

How about creating 4 to 6 million new jobs? Imagine the tax revenues from them.
How about at the same time liquidating one or two of our wars? Imagine the savings.
How about abolishing the subsidies for big oil and big agriculture? Imagine the savings.
It would be a start.

[amani4000]

07:25 PM on 05/05/2011

We could hire at least a half a million people now to round up the illegal aliens and ship them out. That would equal about 4.5 million new jobs!!

[Jerry Lammers]

07:29 PM on 05/04/2011

The whole idea of a debt limit needs to be abolished. We elect grown men and women to the House and Senate. They can determine both spending and revenue raising priorities. It is also up to them to decide whether we live within our means, or continue to borrow. The debt ceiling is merely a political tool that both Democrats and Republicans use for political purposes, unrelated to the welfare of our nation's citizens.

If we were having an intelligent debate, the focus would be on setting a goal of paying off all the government's debts within a decade, not just trying to bring spending and revenues into balance on a yearly basis. We have a real debt of about $9 - $10 Trillion. To pay this off within 10 years would require both substantial tax increases and spending cuts. The Federal Reserve could provide a few $ Trillion to help reduce the debt by continuing Quantitative Easing. Without tax increases, the government could never balance the budget or pay down the debt without reneging on commitments that are many decades old. We have an historic opportunity to choose to cease being a debtor nation. This is a gift our children truly deserve.

[The Professor]

06:50 PM on 05/04/2011

The debt limit shouldn't be raised at all. $14.3 T is quite enough.
Stop spending.

[Altario]

08:54 PM on 05/04/2011

From your lips to Obama's ear.