Tweet About the Debt Limit Deadline Complicates a Deal

The Treasury Department says the government is still headed for default on Aug. 2

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As if Republicans and Democrats didn't have enough problems making a deal to raise the debt ceiling before the government defaults on its debt, this morning, the Treasury Department rejected a Twitter-fueled rumor that it was the deadline to raise the debt ceiling had moved from early August to August 22. “It is unlikely that the date will move by more than a day or two – if at all,” Treasury spokeswoman Colleen Murray said. The confusion began yesterday afternoon when Reuters columnist James Pethokoukis fired off a tweet saying that the deadline for raising the debt ceiling wasn't a deadline at all—in fact, it could easily be moved back: "Developing: Treasury may move back debt-ceiling deadline to Aug. 22." In no time, "phones lit up in Washington and Wall Street," notes The Wall Street Journal and the idea that Republicans and Democrats had all the time in the world to solve their fiscal differences spread.

Sen. Jon Kyl, a chief Republican negotiator on the deficit-reduction package (pictured above), ran with the theme. "Sen. Jon Kyl (R., Ariz.) told reporters... the Treasury Department will soon announce that the August 2 deadline for raising the debt ceiling will be pushed back several weeks," read a blog post on National Review. "The tweet clearly had quite an impact," adds The Journal. "Many Republicans believe Treasury simply made the Aug. 2 date up and don’t buy it. If Treasury moved now to kick the date back three weeks, it would really hurt their negotiating leverage and Treasury Secretary Timothy Geithner would get pummeled." Later in the night, a "Capitol Hill source" told NBC News a similar story: "The Aug. 2nd drop-dead debt-ceiling date is not likely as hard a date as Treasury is leading on. It could -- and very well may, in fact -- be pushed back to mid-August."

In rejecting the rumors the Treasury spokeswoman said  “We will provide an update on the debt ceiling outlook at the beginning of July, as we have done at the beginning of each month this year." So looks like we're back where we were before, on the edge of chaos if a deal isn't brokered.

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