Our non-taxpaying Treasury Secretary says we will hit the debt ceiling on New Years Eve.Treasury Secretary Timothy Geithner said the U.S. debt limit of $16.394 trillion will be met on New Year’s Eve, in a letter to Congress on Wednesday.
“I am writing to inform you that the statutory debt limit will be reached on December 31, 2012, and to notify you that the Treasury Department will shortly begin taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations,” Geithner said in the letter addressed to Senate Majority Leader Harry Reid (D-Nev.)
Geithner said “extraordinary measures” taken by the Treasury Department could create approximately $200 billion in headroom under the debt limit.
“Under normal circumstances, that amount of headroom would last approximately two months,” he said. “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.”
“At this time,” Geithner continued, “the extent to which the upcoming tax-filing season will be delayed as a result of these unresolved policy questions is also uncertain. If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures.”
I still think that this is how the expiring tax cut issue plays out:
Obama and Friends let us go over the cliff, causing everyone to freak out for a few days. Then the President instructs Harry and Nancy to go before the TV cameras, and announce that they are writing legislation that will reinstate all of the tax cuts that just expired a few days ago, except for those earning more than $250,000.
They remind everyone in TV Land that the cuts expired for everyone, thanks to those do-nothing Republicans, but once again, the Democrats have come to the rescue of Working Families. They are ready to vote today to approve the reinstatement of all the cuts (except for those rich, one-percenters!), and will even make it retroactive back to January 1st! They'll also get rid of those mean Medicare/Medicaid cuts, which harm our most at-risk Citizens. All they need is for mean John Boehner to bring it to the floor for an up or down vote.
How can the Republicans not bring it to the floor, how can it not pass through both chambers without any pork/sneakiness attached to it, and how does it not come out as a huge win for the Left?
They get the best of all worlds:
Mandatory Defense cuts
Increased taxes on the "Rich"
Tax breaks for everyone else
No cuts or entitlement reform whatsoever
Being viewed/spun as the Party that "fixed" it