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Geithner on "fiscal cliff"

CNC report from Washington

Added On December 27, 2012

The United States federal government will reach its debt limit of 16.4 trillion dollars by the end of the year.

The country's Treasury Secretary says the department will take measures to keep the government from reaching the limit for about two months.

Treasury Secretary Timothy Geithner said in a letter Wednesday to congressional leaders that the measures could keep the government from reaching the limit for about two months.

According to Geithner, those accounting measures could "create approximately 200 billion U.S. dollars in headroom under the debt limit".

But the secretary noted, given the significant uncertainty existing due to the unresolved tax and spending policies for 2013, it was not possible to predict the effective duration of these measures.

Unless U.S. Congress acts by the end of the year, a combination of tax increases and sweeping spending cuts totaling about 600 billion dollars.

The so called "fiscal cliff" could drive the U.S. economy back into recession.

The Treasury has taken extraordinary measures including asset sales in the past to avert the default on U.S. legal obligations in times of 11th-hour fiscal negotiations between Democrats and Republicans.

And the U.S. President Barack Obama will cut short his family Christmas holiday in Hawaii to tackle the looming "fiscal cliff" back in Washington.

The White House said Obama was scheduled to leave Hawaii Wednesday night and arrive Washington early Thursday.

U.S. lawmakers are also set to return to the capital Thursday.

Democrats and Republicans have less than one week to come up with a deficit reduction plan to avert the year-end "fiscal cliff", which will affect nearly every U.S. family.
 

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