Jan. 8, 2013
The United States may run out of tools to avoid a default as early as February 15, piling more pressure on lawmakers and the Obama administration to resolve their fiscal battles, a study found on Monday.
The U.S. Treasury in late December began shuffling funds in order to keep paying the government's bills, buying time for lawmakers to raise the $16.4 trillion legal limit on the nation's debt. It confirmed the ceiling was scraped on December 31.
Treasury Secretary Timothy Geithner predicted the maneuvers -- which include pausing some investments in federal pension and health benefit funds -- would normally buy the government about two months before the debt limit became binding.
Possible delays in the tax filing season could extend that time further, as the government would get more time to refund taxes, Geithner said at the time.
But the Bipartisan Policy Center, a Washington-based think-tank, said the Treasury may run out of funds between February 15 and March 1, based on an analysis of the government's daily and monthly cash flows.
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Economic Policy Project