(Image source: The New York Times)

 

 

BY ZACH TOOMBS

 

 

Treasury Secretary Tim Geithner is raising the stakes on the automatic tax hikes and spending cuts set to take effect Jan. 1 — by throwing the debt ceiling into the equation.

 

Geither wrote to Congress late Wednesday afternoon, telling lawmakers the U.S. will hit its statutory borrowing limit, aka “debt ceiling,” on Monday, Dec. 31. CNBC’s John Harwood has more. [Video: CharlieRose.com]

 

JOHN HARWOOD: “Now, that doesn’t mean that anything happens immediately, because the Treasury can take various steps to postpone the moment of reckoning — probably a couple of months. But it’s still significant. That’s an effort to pressure Congress.

 

According to The Wall Street Journal:

 

“The temporary measures would create $200 billion in ‘headroom,’ according to Geithner. Under normal circumstances, that amount of headroom would last approximately two months.”

 

Though, that time could change depending on the outcome of debt reduction negotiations. Last August, a headstrong debate over raising the debt ceiling led to a downgrade in the country’s credit rating and a drop in global markets. [Video: C-Span]

 

Last week, House Speaker John Boehner failed to even rally his fellow Republicans behind a debt reduction plan. Wednesday, he told the Democrat-controlled Senate, they had to make the first move.

 

The Washington Post reports:

 

“Boehner’s leadership team has decided that bouncing bills back and forth between the chambers would be the fastest way to reach a compromise … ‘but the Senate first must act ...’”

 

No response from Senate Majority Leader Harry Reid yet. Boehner’s so-called “Plan B” had called for raising taxes only on people earning $1 million or more. The president and Democrats prefer a threshold of $250,000.

US Will Hit Debt Ceiling Dec. 31, Geithner Says

by Zach Toombs
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Transcript
Dec 26, 2012

US Will Hit Debt Ceiling Dec. 31, Geithner Says

(Image source: The New York Times)

 

 

BY ZACH TOOMBS

 

 

Treasury Secretary Tim Geithner is raising the stakes on the automatic tax hikes and spending cuts set to take effect Jan. 1 — by throwing the debt ceiling into the equation.

 

Geither wrote to Congress late Wednesday afternoon, telling lawmakers the U.S. will hit its statutory borrowing limit, aka “debt ceiling,” on Monday, Dec. 31. CNBC’s John Harwood has more. [Video: CharlieRose.com]

 

JOHN HARWOOD: “Now, that doesn’t mean that anything happens immediately, because the Treasury can take various steps to postpone the moment of reckoning — probably a couple of months. But it’s still significant. That’s an effort to pressure Congress.

 

According to The Wall Street Journal:

 

“The temporary measures would create $200 billion in ‘headroom,’ according to Geithner. Under normal circumstances, that amount of headroom would last approximately two months.”

 

Though, that time could change depending on the outcome of debt reduction negotiations. Last August, a headstrong debate over raising the debt ceiling led to a downgrade in the country’s credit rating and a drop in global markets. [Video: C-Span]

 

Last week, House Speaker John Boehner failed to even rally his fellow Republicans behind a debt reduction plan. Wednesday, he told the Democrat-controlled Senate, they had to make the first move.

 

The Washington Post reports:

 

“Boehner’s leadership team has decided that bouncing bills back and forth between the chambers would be the fastest way to reach a compromise … ‘but the Senate first must act ...’”

 

No response from Senate Majority Leader Harry Reid yet. Boehner’s so-called “Plan B” had called for raising taxes only on people earning $1 million or more. The president and Democrats prefer a threshold of $250,000.

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