By Jonathan Capehart

The Washington Post

Dec. 27, 2012

As the nation bobs its way in a barrel toward the “fiscal cliff,” Treasury Secretary Timothy Geithner sent a sobering letter to Congress yesterday. The United States will hit its $16.4 trillion legal borrowing limit on Dec. 31. There are “extraordinary measures” Geithner can take to give the nation $200 billion in headroom, which he said “would last approximately two months.”

But that’s of little comfort. “[G]iven the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013,” Geithner warned, “it is not possible to predict the effective duration of these measures.” That admonition backs up what the Bipartisan Policy Center (BPC) noted in a report last month. “[The extraordinary measures] won’t buy as much time as they did last summer,” the Washington-based think tank said.

So, as we hurtle toward another dance with the debt ceiling, it is imperative that we keep two things in mind. First, raising the legal borrowing limit is not new spending. It’s money already spent by Congress. Second, the federal government will not have enough revenue to cover its obligations without borrowing. To not meet those obligations would make the United States a deadbeat.

According to the BPC, February is a “bad” month because it “typically has very high federal expenditures.” In particular, “many tax refunds are paid in February,” and “taxpayers expecting large refunds are likely to file early.”

Read the full blog post here

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Economic Policy Project