Economy

xchrom

(108,903 posts)

8. US Treasury warns of 'extraordinary measures' amid fiscal cliff deadlock

Thu Dec 27, 2012, 08:06 AM

Dec 2012

http://www.guardian.co.uk/world/2012/dec/26/us-treasury-fiscal-cliff-barack-obama

US Treasury secretary Tim Geithner warned on Wednesday he would have to take "extraordinary measures" to avoid a default on the US's legal obligations as the country is set to breach its $16.4tn (£10.16tn) debt limit.

In a letter to Congress, Geithner said the debt ceiling would be reached on 31 December and that the Treasury could raise $200bn (£124bn) to fund government spending as a stopgap measure. But he warned that the current impasse over the fiscal cliff budget crisis meant it was uncertain how long that money would last.

"Under normal circumstances, that amount of headroom would last approximately two months.

"However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures," Geithner warned.

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