Here we go again: Government weeks away from hitting debt ceiling

McClatchy Newspapers

Thursday, November 29, 2012

While official Washington is focused on potential tax hikes and automatic spending cuts, another fiscal crisis looms on the horizon. A report released Tuesday warned that the federal government is likely to hit a ceiling on issuing new debt come late December and could begin defaulting on obligations by mid-February.

The <a href=”http://dev.bpc.com/library/staff-paper/debt-limit”>report</a> from the influential Bipartisan Policy Center, a policy think tank, also highlighted why there’s less room for the Treasury Department to maneuver than during last year’s debt-ceiling debacle. The center warned that financial markets may see greater turmoil than in 2011.

The government should hit its $16.394 trillion debt limit during the final week of December, according to the center. The Treasury Department can, as it did in 2011, turn to a number of extraordinary measures to avoid defaulting on the debt it has already issued. The juggling act by Treasury is likely to run out, however, somewhere around mid-February.

2012-11-29 00:00:00
McClatchy Newspapers