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Although the fiscal cliff soap opera was pushed aside for a New York minute, the debt ceiling issue in Washington still has plenty of airtime.
The U.S. started the new year by hitting its record debt ceiling of $16.394 trillion. In the final days of 2012, Treasury Secretary Timothy Geithner sent a letter to Congress warning of the inevitable event and said the Treasury Department will take “extraordinary measures” to provide approximately $200 billion in headroom. The tricks were first estimated to give the bobble-heads in Washington about two months of wiggle room, but new calculations show less time.
According to a new analysis by the Bipartisan Policy Center, a Washington-based think-tank, the extraordinary tricks being deployed by Geithner may only last until February 15. Those measures include a delay in the reinvestment of specific government funds, and could even lead to the delay of some tax refunds. In the best case scenario, if you can call it that, the think-tank says the Treasury may be able to keep the lights on until March 1.
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Steve Bell, Senior Director of the Economic Policy Project at BPC, explains, “Our numbers show that we have less time to solve this problem than many realize. We estimate that Treasury will exhaust its borrowing authority and no longer have sufficient funds to meet its obligations in full and on time at some point between February 15 and March 1. It will be difficult for Treasury to get beyond the March 1 date in our judgment.”
Here’s what the debt picture in the U.S. looks like…
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