Now wait a minute here, if Geithner can do this so we don’t reach the ceiling limit, why couldn’t it have been done before? The US Treasury is to begin taking extraordinary measures to delay reaching a 31 December borrowing limit. Treasury Secretary Timothy Geithner said it would take accounting measures to save about $200bn to prevent reaching the $16.4tn borrowing limit.
This as the so called fiscal cliff nears. This is a round of tax increases and huge spending cuts due to come into force in January but over which the Democrats and Republicans are stalled.
In a letter he wrote to congress, Geithner said the $200bn (£124bn) would prevent the government from reaching the borrowing limit for about another two months. The $16.4tn is the amount the government is allowed to borrow to finance its operations.
Mr Geithner said the extraordinary measures were needed to “temporarily postpone the date that the United States would otherwise default on its legal obligations”.
Obama is expected to meet Republican leaders again to try to negotiate a solution, although no new date has been announced. Failure to do so is supposed to be damaging to world economies, and force us into another recession, which some say has already started.
Both sides are still far apart on the fiscal cliff’s $600bn in tax rises and spending cuts that are set to come into force on 1 January, but analysts say a short-term deal may be agreed that will postpone the cuts until spring.
Republican House of Representatives Speaker John Boehner called on the Democrat-led Senate to come up with legislation on how it would avoid the cliff, and pass it to the House for consideration. But a senior administration official said it was up to Republican leaders not to stand in the way of an agreement.