U.S. Treasury officials said Wednesday that when the government hits the debt ceiling at the end of this year, they can employ "extraordinary" measures to keep the government functioning until sometime early next year.
Treasury Assistant Secretary Matthew Rutherford said the Treasury would employ the same types of procedures it has used previously to keep borrowing under the current debt limit of $16.39 trillion until Congress votes to increase the debt ceiling.
The nation's debt currently stands at $16.16 trillion.
The United States has never failed to meet its debt obligations, although the last battle over raising the debt limit in August 2011 went right to the last minute before a compromise was reached between the Obama administration and Congress.
"We continue to expect that these extraordinary measures would provide sufficient headroom under the debt limit to allow the government to continue to meet its obligations until early in 2013," Rutherford said.
The measures to stay under the debt limit include temporarily removing investments from government employee pension funds to clear room for other borrowing. Treasury officials have not been more specific about the date they will reach the limit of their maneuvering room, but private economists have estimated that the government could continue its borrowing operations under the current limit into early March.
The debate over raising the debt limit is just one of the major budget issues facing Congress. Lawmakers and the administration will also need to reach agreement on a budget reduction plan to avert tax increases and across-the-board spending cuts from taking effect in January.
Economists have warned that if this so-called fiscal cliff is not avoided, the adverse effects on the economy could push the country back into recession. -- AP