The U.S. government is approaching the limit of its borrowing authority and will begin taking “extraordinary measures” to delay a vote by Congress on increasing the debt ceiling, Treasury Secretary Timothy F. Geithner said in a letter Wednesday to congressional leaders.
Under normal circumstances, the federal government would reach its statutory debt limit on Dec. 31, Geithner said. However, the Treasury Department can take certain steps authorized by law, such as suspending investments in a federal employee retirement fund, to extend its borrowing authority for a short-term period.
Normally a tough vote for the majority party in both chambers of Congress, lifting the debt ceiling has become even more of a hot-button political issue in recent years, as Republicans have demanded large spending cuts in exchange for voting for the measure.
It has been anticipated for some months that a vote to increase the debt ceiling would have to take place in early 2013 if Congress could not address the issue before then. The need to raise the debt ceiling triggered the makeshift agreement in August 2011 that led to the automatic spending cuts that along with a range of expiring tax cuts make up the fiscal cliff.
The showdown last year almost led to a shutdown of the government and rattled financial markets because of the prospect that some lawmakers would rather default on U.S. financial obligations than authorize an increase in the debt ceiling.
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