Talks on the debt ceiling are becoming more furious as the Treasury gets closer to hitting the ceiling.
Treasury Secretary Timothy Geithner said in a letter to congressional leaders on December 26 that he would take extraordinary measures to create about $200 billion in head room under the debt limit.
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That amount would normally buy about two months’ time for the Treasury but uncertainty surrounding the fiscal cliff could cause the limit to be reached sooner.
Congress and President Obama will return to work on Thursday, December 27, after cutting the holiday recess short to continue negotiations on the deficit, of which the debt ceiling has become a part.
Leaders in the House were forced to withdraw their latest proposal, a plan created by House Speaker John Boehner dubbed Plan B. Now, House members say it’s the Senate’s turn to send an amended proposal.
Raising the debt ceiling was part of Plan B and until something is decided, Geithner said the Treasury would halt sales of certain securities and freeze new debt issuance in an effort to stave off reaching the limit.
The House will hold a pro-forma session on December 27 but even if all members are called back, it’s likely most would not return until December 28.
That leaves time for only a small deal to be reached since the current tax laws
are due to expire on January 1.