This week, America got some exciting news -- in addition to the death of the world's most famous terrorist. It turns out the U.S. has three more weeks than initially thought until the nation could default on its debt. Treasury Secretary Timothy Geithner revealed yesterday that the new 'we really mean it this time' date is August 2nd, not July 8th. If the debt ceiling is not raised by then, the U.S. economy will face dire consequences.
Taxpayers Provided the Extension
First, let's go to an excerpt from the latest letter he wrote to Congress for the detail:
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.
Just to be clear, the U.S. is still scheduled to hit the debt limit on May 16th. By now, it's pretty clear that we won't have an agreement by then. But at that time, Geithner intends to take "extraordinary measures" that will give Congress a little extra time to get its act together and raise the debt ceiling. Geithner says that higher-than-expected tax receipts will provide an extra three weeks for those extraordinary measures.