When will the US debt ceiling be increased again ?
Settled on 02/02/2013 09:41 Settled by Josef Biesenberger
U.S. is nearing its debt ceiling again, Treasury Department warns
The federal government will probably hit its $16.4-trillion borrowing limit by the end of the year, adding more urgency to efforts to avoid the fiscal cliff.
The Treasury Department said Wednesday that the U.S. probably will hit its $16.4-trillion borrowing limit by the end of the year, at the same time that Congress will be grappling with the automatic tax hikes and large government spending cuts scheduled to kick in Jan. 1.
"It adds to the caldron of the dark brew," Mark Zandi, chief economist at Moody's Analytics, said of the fast-approaching debt limit. "That makes the disaster more disastrous."
The Congressional Budget Office and most economists predict another recession in 2013 if the confluence of tax increases and spending reductions known as the fiscal cliff takes place.
And straying too close to the debt limit â€” not to mention hitting it â€” probably would lead to a second downgrade of the U.S. credit rating. In mid-2011, a bitter standoff over the issue led to the first credit revision.
The Treasury said Wednesday it could take "extraordinary measures" to juggle the nation's finances to give Congress and the White House more time to work on a debt-limit increase. But even those steps â€” essentially a series of accounting maneuvers â€” would buy only into early 2013 before the government faced a possible default.
As of Tuesday, Oct 30 2012, the U.S. debt was $16.165 trillion; current debt ceiling is $16.394 trillion;