Debt ceiling armageddon pushed back to August 2 

On a number of occasions, the Examiner has noted that there is no hard and fast deadline for raising the debt ceiling, and now U.S. Secretary Tim Geithner has pushed back the administration's drop dead date by several weeks to August 2.

In a letter to members of Congress released Monday Geithner reiterated his warning that the Treasury would have to begin taking "extraordinary measures" if the debt  limit is not raised by May 16, but:

Largely as a result of stronger than expected tax receipts, we now estimate that these extraordinary measures would allow the Treasury to extend borrowing authority until about August 2, 2011, approximately three weeks later than was forecast last month.  This is a projection and is subject to change based on government receipts and other factors during the next three months.  While this updated estimate in theory gives Congress additional time to complete work on increasing the debt limit, I caution strongly against delaying action.  The economy is still in the early stages of recovery, and financial markets here and around the world are watching the United States closely.  Delaying action risks a loss of confidence and accompanying negative economic effects.

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Philip Klein

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