Geithner Extends Debt-Ceiling Deadline to Aug. 2 With Extraordinary Steps

Posted: May 3, 2011 in Economic Crisis, US News

Ian Katz and Vincent Del Giudice
Bloomberg
May 3, 2011

Treasury Secretary Timothy F. Geithner said the U.S. will have three weeks more than previously seen before hitting its borrowing limit, giving the White House and Congress more time for a deal to raise the debt ceiling.

The U.S. can borrow until Aug. 2 after reaching the $14.29 trillion limit because of “stronger-than-expected tax receipts” and by taking “extraordinary measures” such as suspending the sale of bonds to finance state and local infrastructure projects, Geithner said in a letter to congressional leaders yesterday. He previously said the deadline would be July 8. Without such measures, the legal limit will be reached May 16, he said.

The Treasury Department will take steps starting this week to provide additional borrowing room, Geithner said in the letter to Senate Majority Leader Harry Reid, a Nevada Democrat, and House Speaker John Boehner, an Ohio Republican. The May 16 date for when the U.S. reaches the limit unless Congress acts is unchanged from an estimate Geithner made last month.

The Obama administration and congressional Republicans are debating how and whether to raise the debt limit. Republicans say they won’t act unless President Barack Obama offers more spending cuts. Geithner and administration officials have warned that global investors will lose confidence in the U.S., hurting the economic recovery, if Congress waits too long to act.

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