US Treasury to take steps to avoid borrowing limit
WASHINGTON (AP) — The U.S. Treasury Department will begin taking steps on Friday to delay hitting the government’s $16.4 trillion borrowing limit on Dec. 31.
Treasury Secretary Timothy Geithner said in a letter Wednesday to congressional leaders that the department will use accounting measures to save approximately $200 billion. That could keep the government from reaching the limit for about two months.
The move comes as President Barack Obama and the GOP congressional leadership resume negotiations over how to avoid a series of tax increases and spending cuts, known as the ‘‘fiscal cliff,’’ that are scheduled to take effect in the new year.
Obama has sought to include an increase in the borrowing limit in any agreement to avoid the cliff. But Speaker John Boehner and other Republican leaders have demanded concessions in return. The negotiations hit a stalemate last week. Obama and lawmakers are returning to Washington this week to try again.
Geithner says the negotiations over tax and spending policies make it difficult to predict how long he can delay reaching the borrowing limit. The absence of a specific timeframe may be intended to pressure Republicans to allow a debt limit increase in a potential budget deal.