Economic Buzz: U.S. Will Reach Debt Ceiling On Dec. 31: Geithner

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Economic Buzz: U.S. Will Reach Debt Ceiling On Dec. 31: Geithner

The United States will reach the $16.4 trillion debt ceiling at the end of December, Treasury Secretary Timothy Geithner said Wednesday. In a letter to Senate and House leaders, Geithner wrote that the Treasury will soon undertake accounting maneuvers to create $200 billion in "headroom" that will delay a violation.

It was unclear how long this headroom would last, he said, because tax and spending policies for 2013 are still under negotiation as part of talks to avert the so-called fiscal cliff. Such maneuvers would usually run for about two months, but if a deal on the fiscal cliff is not reached, the extraordinary measures could last longer, according to Geithner.

"Treasury will provide more guidance regarding the expected duration of these measures when the policy outlook becomes clearer," he added. Congress must act to raise the debt limit. Republicans have said they want to use the debt-ceiling approval to win concessions on spending from the White House.

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