New Debt Limit Deadline in August

Lawmakers have a little longer to fight over raising the debt limit. Treasury Secretary Timothy Geithner is undertaking emergency measures to postpone a potential default on the federal debt. By borrowing money from a pension fund from federal workers, suspending a Treasury program that helps state and local governments manage their debts, and other emergency tactics, Geithner pushed the deadline for raising the debt limit back to August 2. Unexpectedly high tax revenues also helped push back the deadline. Geithner isn't letting Congress relax, however, warning lawmakers that failing to raise the $14.3 trillion limit would “have a catastrophic economic impact.” He also attacked attempts to drag the debt limit into the debate of the nation's long-term fiscal health. “Contrary to common misperception, the debt limit has never served as a constraint on future spending, nor would refusing to increase the debt limit reduce the obligations the country has incurred,” he wrote in a letter to Congress. President Obama and Geithner want an independent vote on the debt limit, but many Republicans want caps on spending.