The U.S. government will exhaust its borrowing authority between mid-February and early March if Congress doesn't raise the debt ceiling, outgoing Treasury Secretary Timothy Geithner told Congress in a letter today.
The nation nudged against the $16.4 trillion debt ceiling just before the New Year. Geithner has since been using accounting maneuvers -- known as "extraordinary measures" -- to keep the nation from missing its debt payments and other bills.
But President Barack Obama and House Republicans are still squabbling over how to raise the debt ceiling.
The GOP wants dollar-for-dollar spending cuts; Obama says no way.
Geithner warned that the extraordinary measures will be exhausted "between mid-February and early March of this year" -- and that lawmakers must raise the debt ceiling if they want to keep the nation from defaulting.
Geithner said it's difficult to pinpoint the exact date the nation faces default because of tax season.
"We will provide a more narrow range with a more targeted estimate at a later date. Any estimate, however, will be subject to a significant amount of uncertainty because we are entering the tax filing season, when the amounts and timing of tax payments and refunds are unpredictable," he writes.
That's why "Congress should act as early as possible" to increase the debt ceiling, he said.
If lawmakers don't act, he warned, the 80 million bills the government pays each month will be "put at risk," including Social Security, Medicare, Medicaid, military salaries and veteran benefits, unemployment insurance, tax refunds and employee salaries.
Source: Politico | RACHAEL BADE