Dispatch from Reuters

[CARLHAYDEN]

Geithner asks Congress for higher U.S. debt limit

Fri Aug 7, 2009 9:43pm EDT 
 
By David Lawder

WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner formally requested that Congress raise the $12.1 trillion statutory debt limit on Friday, saying that it could be breached as early as mid-October.

"It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations," Geithner said in a letter to Senate Majority Leader Harry Reid that was obtained by Reuters.

A Treasury spokeswoman declined to comment on the letter.

Treasury officials earlier this week said that the debt limit, last raised in February when the $787 billion economic stimulus legislation was passed, would be hit sometime in the October-December quarter. Geithner's letter said the breach could be two weeks into that period, just as the 2010 fiscal year is getting underway.

The latest request comes as the Treasury is ramping up borrowing to unprecedented levels to fund stimulus and financial bailout programs and cope with a deep recession that has devastated tax revenues.

It is expected to issue net new debt of as much as $2 trillion in the 2009 fiscal year ended September 30 and up to $1.6 trillion in the 2010 fiscal year, according to bond dealer forecasts.

The request to increase the debt limit will likely raise the ire of Republicans who have accused President Barack Obama of runaway spending.

[Democratic Hawk]

The request to increase the debt limit will likely raise the ire of Republicans who have accused President Barack Obama of runaway spending.

Such Republican ire would only fall deaf ears here, Carl, given their track record

[CARLHAYDEN]

Yes, Bush and the Republican Congress were irresponsible in their spending, particularly 2005-2006, which was a major factor in their defeats in 2006 and 2008.

A lot of the big spending Republicans in Congress have departed (often involuntarily) and more are being pushed out the door by their constituents (there's a clown in South Carolina by the name of Inglis who is going to be defeated next year).

However, the Democrat Congress has really gone wild in its spending, making the Republican spending I referred to, look like small potatoes.

[Mint]

The request to increase the debt limit will likely raise the ire of Republicans who have accused President Barack Obama of runaway spending.

Such Republican ire would only fall deaf ears here, Carl, given their track record

Well there is a reason they keep saying they wish their leadership was more Conservative...

But seriously for people to be talking about another stimulus now in addition the healthcare 'reform' and the bail outs is pretty much the height of insanity. I don't care how many times they raise the ceiling, eventually the roof is going to come down on us. And hiking taxes is not a politically viable (or sustainable, IMO) solution to that.

[opebo]

And hiking taxes is not a politically viable (or sustainable, IMO) solution to that.

What the hell?  We had 70%+ top tax rates from the 1930s to the late 1970s and it was the best economic period in american history!  The only thing that is keeping tax rates so dangerously low is the power of the elite, not any practical limitation.