Geithner: Debt Ceiling Will Be Reached on New Year’s Eve

According to Geithner, the extraordinary measures are:

• Suspending sales of State and Local Government Series Treasury securities;
• Determining that a “debt issuance suspension period” exists, which permits the redemption of existing, and the suspension of new, investments of the Civil Service Retirement and Disability Fund and the Postal Service Retirees Health Benefit Fund;
• Suspending reinvestment of the Government Securities Investment Fund and
• Suspending reinvestment of the Exchange Stabilization Fund.

The measures, all of which have been employed during previous debt limit impasses, have the effect of creating or conserving “headroom beneath the debt limit.”

“These measures are limited and therefore can postpone only briefly the need for an increase in the statutory debt limit,” Geithner concluded. “On average, the public debt of the United States is increasing by approximately $100 billion per month (although there are significant variations from month to month). In total, the extraordinary measures currently available free up approximately $200 billion in headroom under the limit.”