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Treasury Secretary Tim Geithner stands at President Barack Obama's side along with White House Chief of Staff Jack Lew as President Obama nominates Lew to be his new Treasury Secretary.
Treasury Secretary Tim Geithner in a letter to House Speaker John Boehner and other congressional leaders:
Dear Mr. Speaker:

I am writing to provide additional information regarding the extraordinary measures Treasury has undertaken in order to avoid default on the nation’s obligations.

Treasury currently expects to exhaust these extraordinary measures between mid-February and early March of this year.  We will provide a more narrow range with a more targeted estimate at a later date.  Any estimate, however, will be subject to a significant amount of uncertainty because we are entering the tax filing season, when the amounts and timing of tax payments and refunds are unpredictable.  For this reason, Congress should act as early as possible to extend normal borrowing authority in order to avoid the risk of default and any interruption in payments.

If the extraordinary measures were allowed to expire without an increase in borrowing authority, Treasury would be left to fund the government solely with the cash we have on hand on any given day.  As you know, cash would not be adequate to meet existing obligations for any meaningful length of time because the government is currently operating at a deficit.

The letter goes on to discuss the ramifications of default and to explain why America's full faith and credit should never be taken hostage, but the key news here is that Congress now has a more concrete deadline—a deadline not for when we're going to hit the debt limit (we've already hit it) but for when the administration says it will no longer be able to easily bail Congress out from its failure to act. And now, as President Obama said today, it's Congress's turn to act.

Originally posted to The Jed Report on Mon Jan 14, 2013 at 02:29 PM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  What else Geithner wrote: (19+ / 0-)
    Threatening to undermine our creditworthiness is no less irresponsible than threatening to undermine the rule of law, and no more legitimate than any other common demand for ransom.

    The sh*t those people [republicans] say just makes me weep for humanity! - Woody Harrelson

    by SoCalSal on Mon Jan 14, 2013 at 02:42:17 PM PST

  •  Get out the popcorn (4+ / 0-)
    Recommended by:
    Vetwife, Bronxist, 3goldens, Linda1961

    We're going to see who's the king of the cavers.

    •  I really think it's simple (3+ / 0-)
      Recommended by:
      VirginiaBlue, Linda1961, avamontez

      Obama knows that Boehner has 30 or so freshman idiots who won't toe the line, and without them he doesn't have a majority.  They're the small minority who really don't want to govern; they want to throw a brick through the workings of the government.  

      Boehner and the majority of the minority party really don't want the country to default.  That will hurt a lot of rich people, including many campaign donors, who will be very mad at them.  Obama is betting that as the hour hand sweeps past 11:59 PM they will hold their noses and do a deal with the Democrats to overcome the teabaggers.  They will do it entirely on Obama's terms because this time he's giving them no choice.

      Boehner and his ilk seriously don't want to do that because one, it will be humiliating and two, it will throw severe doubt on his leadership within his party.  But Obama is telling them straight up that that's what he's going to force.  He knows they won't piss off their rich masters by ruining the US credit rating.  And he's going to use that to bring a generous dose of HULK SMASH to their caucus.

  •  Do I get kicked out of my HUD apartment? (8+ / 0-)

    Do I have to pay $726 a month with my now not coming $710 SS check?

    "Til you're so fucking crazy you can't follow their rules" John Lennon - Working Class Hero

    by Horace Boothroyd III on Mon Jan 14, 2013 at 02:43:01 PM PST

  •  So sad. The fact that it comes to this (8+ / 0-)

    is just so disgustingly sad.  The SecTres had to send the Speaker a note asking him to, ya know, do his fucking job.

    Ffs.

    It'd be funny if it wasn't tragic.

    We're trapped in the belly of this horrible machine,

    And the machine is bleeding to death.

    by Marcus Tullius on Mon Jan 14, 2013 at 02:45:53 PM PST

  •  link (2+ / 0-)
    Recommended by:
    Marcus Tullius, TomP

    Here is a source link at Treasury.gov

  •  also from the letter: (9+ / 0-)
    In an address to the nation in 1987, President Reagan said, “Unfortunately, Congress consistently brings us to the edge of default before facing its responsibility.  This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits.  Interest rates would skyrocket.  Instability would occur in financial markets and the federal deficit would soar.  The United States has a special responsibility to itself and the world to meet its obligations.  It means we have a well-earned reputation for reliability and credibility – two things that set us apart in much of the world.”
  •  By grand design... (4+ / 0-)

    I have no proof, but I think the GOP has been working on this for over a decade. Two $4 trillion wars, unfunded Medicare Part-D, obscene defense budgets, job outsourcing, labor insourcing, all the while slashing revenue.
    You wait, the GOP will demand massive cuts in SS and Medicare, else they will blow up the worlds economy.
    A more vile, wicked, collection of festering puss encased by skin I've not seen.

    •  Blow up the worlds economy and who is hurt? (0+ / 0-)

      Us serf will get hit, but we're used to having little.  The rich, corporations/chamber of commerce and the M-I-C will get hit the hardest.

      It's a bluff they know they can't reasonably go through with and even the WSJ and Newt Gingrich know it.  

      The Senate will pass a clean raise, Pelosi will do one of those gimmicks where everybody from her caucus signs on for a clean raise - whereby if she gets 218 to sign it than the Speaker has to bring it to the floor.  So they'd need 18 Republicans out of the 233 person GOP caucus to cross over and sign it.  

      "The world is made for people who aren't cursed with self awareness" -Annie Savoy (Bull Durham)

      by Jacoby Jonze on Mon Jan 14, 2013 at 02:58:46 PM PST

      [ Parent ]

      •  I think this is a comfortable happy place for many (1+ / 0-)
        Recommended by:
        George Hier

        people, but I don't think it's true.

        The idea that the masters of the universe would stand to lose a ton in a global collapse is not sound, in my opinion. I believe they will lose money but gain marketshare.

        If I were a superwealthy master of the universe, I'd want to collapse the system before it peters out. If it peters out, I would lose the power of the media, military, legislature, and executives on a global scale.

        The World Social Forum types and the eco-terrorists would have a point - people would want to do something different. It would take decades. I would hemorrhage money and power until the rabble throws me to the curb, if I'm lucky...

        Much better to crash the system while me and my boys run the show. It will be a different world, for sure, but I will have the guns and loudspeakers.

        Democracy - 1 person 1 vote. Free Markets - More dollars more power.

        by k9disc on Mon Jan 14, 2013 at 03:17:27 PM PST

        [ Parent ]

        •  We'll have to agree to disagree. (1+ / 0-)
          Recommended by:
          k9disc

          Rich folks are not going to risk all of their riches on the chance they might end up better on the other side decades from now.  

          It wouldn't be a total collapse by any means, and there would be a Dem President, and Dem Senate and Dem Treasury Secretary - the rich, corporations and banksters don't want these folks at the levers of power for any collapse - they'll force the GOP to cut a deal and move on.  

          "The world is made for people who aren't cursed with self awareness" -Annie Savoy (Bull Durham)

          by Jacoby Jonze on Mon Jan 14, 2013 at 03:28:29 PM PST

          [ Parent ]

          •  The super rich (2+ / 0-)
            Recommended by:
            k9disc, George Hier

            Did quite well in general since the 2008 economic collapse. They have to power and connections to availed losses while cashing in non the upswing.

          •  I think any collapse could easily become total to (1+ / 0-)
            Recommended by:
            George Hier

            much of the 1st world. JIT manufacturing, business lines of credit, 10,000 mile supply lines. I don't think anyone but the Doomers believes our situation is as dire as it is.

            Of course, that's my opinion, and of course we can disagree. I'll be happy to be wrong as well, JJ.

            Democracy - 1 person 1 vote. Free Markets - More dollars more power.

            by k9disc on Mon Jan 14, 2013 at 06:03:45 PM PST

            [ Parent ]

        •  The "masters of the universe" are made (0+ / 0-)

          of meat just like the rest of us.  Long pork anyone?

          You have watched Faux News, now lose 2d10 SAN.

          by Throw The Bums Out on Mon Jan 14, 2013 at 03:57:08 PM PST

          [ Parent ]

        •  Yup. (3+ / 0-)
          Recommended by:
          VirginiaBlue, k9disc, George Hier

          I belive the "Masters of the Universe" belive they have enough money and armed followers not only to weather a crash, but to make sure that when the pieces are picked up, that this nation is remade in their image.

          They are convinced that THEY should be in charge, and they are TIRED of playing at Democracy to try and convince people they look down on to put them in charge.

          The stupidity of the Tea Party is just the tool they need. I am convinced they want to destroy this nation (in order to remake it) and that starts with a default.

          I will be (very pleasantly) shocked if we do not go into default.  I'm expecting the worst.

          "The future of man is not one billion of us fighting over limited resources on a soon-to-be dead planet. . .I won't go back into the cave for anyone."

          by Whimsical on Mon Jan 14, 2013 at 04:26:55 PM PST

          [ Parent ]

          •  Sounds exactly like the Shock Doctrine.... (1+ / 0-)
            Recommended by:
            George Hier

            ....destroy the entire order and start over with a blank slate, re-made to their liking (by the greedy 1%); employing severe austerity measures, mass lay-offs, busting unions, lifting any kind of trade protection barriers and privatizing every kind of public service you can think of. They have achieved this heinous measure in other parts of the globe and they now have set their sights on the United States.

            What they typically do is take advantage of a crises-whether genuine or manufactured (by them). In this case, the "crises" is the national debt, manufactured by the 1% via these trillion dollar unnecessary, unpaid for wars, reckless tax cuts for the truly wealthy and gross malfeasance committed on Wall Street that crashed our economy in 2008 as well as worldwide. Now they claim that these austerity measure are what is needed to jump start the economy by claiming that the massive deficits-that THEY created are the most important issue right now, instead of creating jobs in order to address the deficits, long term.  We MUST NOT let this happen.

            If Not Us, Who,..... If Not Now, When?

            by VirginiaBlue on Mon Jan 14, 2013 at 05:07:24 PM PST

            [ Parent ]

          •  Internal Colonialism... Domestic Colonialism (0+ / 0-)

            Corporate Colonialism...

            I think that is the end game of this planetary brinksmanship. Break it now and the dominant hegemony remains intact.

            Corporate and/or the Establishment, take your pick, hold all the cards.

            The only thing they don't have is human capital. That's easy to change if people get hungry enough, or with the proper application of social pressure.

            Democracy - 1 person 1 vote. Free Markets - More dollars more power.

            by k9disc on Mon Jan 14, 2013 at 06:00:11 PM PST

            [ Parent ]

      •  I see your point (0+ / 0-)

        But, they took us to the brink in '11, and they are threatening to shut the government down this time. I don't think anyone doubts that the extreme right within the GOP would love to cause as much chaos as possible.
        If it does get ugly, I think the GOP will pay dearly in the mid-terms. Non-insane Repubs know this, so there may be some help there.
        I hop your prediction is correct, however; I'm not optimistic.

    •  Naomi Wolfe's book - is it ?Disaster Capitalism?nt (3+ / 0-)
  •  Start now with bouncing Congressional paychecks (3+ / 0-)

    -- why wait to next month. Also turn down the heat on Capitol Hill enough to have them wearing three sweaters. That should save a few dollars.

    We have only just begun and none too soon.

    by global citizen on Mon Jan 14, 2013 at 02:52:19 PM PST

  •  Very interesting timing... (12+ / 0-)

    Given the SOTU is on Feburary 12th which is five weeks away.  

    Basically President Obama is going to give his State of the Union Address during the height of the debt ceiling hostage taking.  

    You almost have to figure somebody planned it this way...

    "The world is made for people who aren't cursed with self awareness" -Annie Savoy (Bull Durham)

    by Jacoby Jonze on Mon Jan 14, 2013 at 02:52:30 PM PST

  •  Expecting the GOP to "do the right thing... (0+ / 0-)

    ...is the same as expecting the Sherriff of Nottingham to do the right thing.  After all, they both take their orders from the same dastardly fiend.

    Prince John, by any other surname, is still Prince John.

    Proponents of gun violence own guns. Opponents of gun violence do not own guns. What part of this do you not understand?

    by Liberal Panzer on Mon Jan 14, 2013 at 02:56:40 PM PST

  •  Can anyone email the Speaker (2+ / 0-)
    Recommended by:
    Vote4Obamain2012, JamieG from Md

    or do you live in his district? Because I think a WTF letter a day is in order, and my two worthless piece of shit congress people aren't worth writing.  John Boehner, Mitch McConnell and Eric Cantor are ruining my country - seriously, who "wins" in this situation? Sure as shit not me or my husband's business or my job that is finally taking shape again after a long recession.

    I'm pretty tired of being told what I care about.

    by hulibow on Mon Jan 14, 2013 at 02:56:48 PM PST

  •  A Modern Civil War (8+ / 0-)

    There used to be a faction in the politics of this country called the Southern Democrats.  They helped keep the Democrats in power for fifty years, despite the fact that the national Democratic Party put policies in place they didn't support.

    Then Johnson signed the Civil Rights Act, and Nixon used the resentment over this to lure those Dixiecrats into the Republican Party.

    So we should give them a label that more accurately describes their background, beliefs, and priorities.

    I propose that we -- and eventually all the pundits -- stop calling the lunatic wing of the Republican Party the Tea Party (which is a meaningless label, big surprise), and start calling them what they are:  Southern Republicans.

    Of course, there is a significant difference between the Dixiecrats and these SR's.  Because southerners were fixed in their determination to not vote for Republicans for a hundred years after Reconstruction, Democrats could fairly easily ignore their racist social ideas and wackjob economic instincts, and do the right thing.  SR's have, instead, taken control of the Reps in ways that would horrify the comparatively sane Nixon.

    And ain't that saying something.

    Then we have a realistic picture of the Republican Party:

    Southern Republicans, who hate all non-white people, women who don't stay in their place, and the Federal gummint.

    Objectivist/Libertarians like the Pauls (Ron, Rand, and Ryan) who espouse the fantasy world of their Russian-emigre guru, no matter the complete disconnect from the real world.

    And finally, their real masters, Corporate Republicans, because corporations and their leaders are the real beneficiaries of the Republicans' ideas, right up to the point at which their ideas create a disaster for all of us, including the corporations who can't see beyond the next quarterly report.

    That combination:  Hatred of the Federal government dating from the 1860's; hatred of all government dating from a 50's science fiction novel; and hatred of government interference in amassing maximum profits today, no matter the cost -- is the driving force behind the politics as hostage crisis we see in Washington today.

    None of it has any connection with or interest in reason or the general welfare.

    Good luck to all of us.
     

    In Washington, whenever anyone does something wrong, everyone else gets punished.

    by Noziglia on Mon Jan 14, 2013 at 02:57:04 PM PST

  •  We can count on Geithner when Wall Street's (5+ / 0-)

    interests happen to align with those of the rest of us.

    The frog jumped/ into the old pond/ plop! (Basho)

    by Wolf10 on Mon Jan 14, 2013 at 03:02:29 PM PST

  •  Tax Return season... Republicans Stole your Return (3+ / 0-)

    They want to sacrifice your money to sabotage the economy to grab power.

    The end.

    Neat and tidy.

    It surely has legs, I wonder if the Democrats will use them...

    Democracy - 1 person 1 vote. Free Markets - More dollars more power.

    by k9disc on Mon Jan 14, 2013 at 03:08:15 PM PST

  •  Dont underestimate GOP radicals willingness.... (2+ / 0-)
    Recommended by:
    shrike, Vote4Obamain2012

    to force a default.  To the substantial radical faction in the GOP house, it's worth quite a bit of collateral damage if they can thereby destroy the foundations of the New Deal and Great Society social and regulatory structure of government, which in their view represented an historic dramatic wrong-turn in American history.  The 2010 election gave them the firm belief that finally, they had a realistic chance of reversing that wrong turn, and in the wake of the 2012 election they fear that if they let go of this powerful bit of leverage, their chance will evaporate, perhaps never to come again.  That many of them are blatant hypocrites where it comes to military and spending projects in their own districts won't faze them, any more than your male dog will feel shame over licking his genitals in the presence of human company.

    About the only thing that will bring enough of this radical faction around is if fear of a majority of their previously red-leaning electorate abandoning them over their stance becomes greater than their fear of someone even more radical defeating them in a GOP primary.  Boehner will end up coping with them by another suspension of the Hastert rule to permit enough sane GOP reps to vote with the dems, but what will follow will be a vicious civil war within the GOP party between the radicals who believe they were betrayed by the establishment and the business establishment wing of the GOP.

    •  Then they are stupid about economics & government (0+ / 0-)

      as they are about patriotism, how womens bodies work, the ability of more guns to brings about less death and a multitude of fantasy ideals that have no basis in reality. They tear it down and it will oming roaring back even stronger... Anger is a great way to get the apathetic out to vote & people will be abgry as thier stupidity harms people they know.

      Fear is the Mind Killer...

      by boophus on Mon Jan 14, 2013 at 04:21:51 PM PST

      [ Parent ]

  •  The GOP wants to be nearer to GOD. (1+ / 0-)
    Recommended by:
    shrike

    They want "The Book Of Revelations" to come to pass.  First, they have to destroy the American Economy, thus the world economy.  Then the world goes to war.  Then they will await the agents of Satan to rule the world, and then Satan himself.  Of course Jesus comes in to smite the evils ones and takes the GOPer's to heaven (the Rapture?).  In any case, the GOPer's are hardwired to see the world collapse, and the to see man almost destroy himself, but before that Jesus, takes the good people to heaven.  These idiots will not act with common sense against their hardwiring.  IMHO.  THEY WANT AMERICA TO BE DESTROYED!!!

    There is no hell on earth appropriate enough for those who would promote the killing of another person, in the name of a god.

    by HarryParatestis on Mon Jan 14, 2013 at 03:20:08 PM PST

    •  True, Dominionism is our enemy. (0+ / 0-)

      Yet that word means nothing to most liberals.  

      Also it is a root issue with AGW.  The Dominionists deny all science.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Mon Jan 14, 2013 at 03:31:43 PM PST

      [ Parent ]

    •  Not the whole GOP (0+ / 0-)

      Actually, there isn't a "whole GOP" right now because there are enough Dominionists and Randians in Boehner's caucus that without them he doesn't have a majority.  Obama is betting -- and it's a very good bet -- that there are enough sane Republicans who don't want to piss off their rich masters to force a deal.  This will be the case with or without Boehner.

      There aren't enough crazies to run things, only to throw a wrench in the works.  Now that he doesn't have to worry about re-election Obama can risk being a scary black dude.  The Republicans will whine and pitch a fit but in the end Pelosi only needs a couple dozen of them to come over to entirely change the dynamic.

      Obama has been slow-playing for his first term, but this move is our notice that the new game is all-in.  The baggers are too stupid to realize it won't turn out the same way this time as it did last year.  As Pelosi once said, elections have consequences.

  •  Best way to ride it out for us at least is to not (0+ / 0-)

    spend a dime more then we need to. I already am planning to reduce all payments to absolute minimums... Figure they do this with the economy (already being weighed down by the austerity idiots in Europe) will fall down and have a very difficult time getting up again without extraordinary efforts ... Shades of the depression when AHs like this were stomping all over things and then suffering as bad as everyone eles after they F*** things up worse.  

    They are so cornered.

    Fear is the Mind Killer...

    by boophus on Mon Jan 14, 2013 at 04:11:34 PM PST

  •  I wish I knew (0+ / 0-)

    what to do in the face of this impending, self imposed (Republican) disaster.
    I really don't.
    I believe they will do it.
    These people are obsessed with destroying this President. If that means they have to destroy the country to do it, so be it.
    They believe they must destroy the village to save the village. They have a tiny, powerful constituency who see the greatest opportunity in a century and thus encourage the tendencies of the extremist elements.

    They now have 4 to 6 weeks to amplify their simplistic message and the press will assist.
    Millions of people who do not have the patience/interest/comprehension to understand the law and the political manuevering do know that their pay checks went down recently because their taxes went up (as the result of the expiration of the ill advised payroll tax cut). They will now be told that Obama's refusal to negotiate on the debt ceiling is tantamount to extending the credit limit on the "Obama credit card" and such gibberish. It is simple and fits in a few sound bites.

    The President deserves credit for calling their bluff and explaining the true meaning of the debt ceiling today. But it was too little too late, he should have done that last year instead of negotiating for the "Grand Bargain".

    I think they will gamble that his support will erode rapidly upon collapse and they can fill the vacuum.
    I am not particularly sanguine about the prospects for the future of the Republic.

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