Geithner: Gov't Could Pass Debt Limit by Mid-February - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Geithner: Gov't Could Pass Debt Limit by Mid-February

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Treasury Secretary Timothy Geithner says the government has begun borrowing from the federal employee pension fund to keep operating without surpassing its debt limit.

Geithner says in a letter to congressional leaders that the move will free up $156 billion in borrowing authority while Congress debates increasing the $16.4 trillion debt limit.

The government reached borrowing limit on Dec. 31, but began using bookkeeping maneuvers to keep from surpassing it. Geithner has told congressional leaders Treasury expects to exhaust those measures by mid-February to early March.

The action has been taken by other Treasury secretaries and will not put in jeopardy any monthly pension payments. Geithner said he will replace the funds removed from the pension account after the borrowing limit is raised.

Geithner said he would provide a more precise estimate of when the government will reach that threshold once it moves closer to the deadline.

Meanwhile, President Barack Obama is demanding that Congress quickly raise the nation's $16.4 trillion debt limit, telling reporters, "we are not a deadbeat nation."

At a White House news conference less than a week before he takes the oath of office for a second term, Obama warned that if the nation's borrowing authority isn't extended, "Social Security benefits and veterans' checks will be delayed."

And he's warning Republicans not to insist on cuts to government spending in exchange for raising the debt limit. He says, "They will not collect a ransom in exchange for not crashing the economy." He said he's willing to consider deficit reductions, but that the steps will have to be taken independently from a vote to raise the debt limit.

He said letting the government shut down rather than renewing funding beyond the end of March "will hurt the economy."

In response, Senate Republican leader Mitch McConnell of Kentucky said Obama and his allies in Congress need to get serious about spending, and that the debt-limit debate is the perfect time for it.  (AP)

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