U.S. to Hit Debt Ceiling by May 16

Wall Street Journal reports:

The Treasury Department is forecasting that the U.S. will reach its debt limit no later than May 16.

The new forecast is more precise than previous projections, which were given in a range. The Treasury Department last month forecast the U.S. would reach the $14.294 trillion limit between April 15 and May 31.

"This is a projection based on the expected level of tax receipts, the timing of our commitments and obligations over the next several weeks, and our judgment concerning the level of cash balances we need to operate," Treasury Secretary Tim Geithner said Monday in a letter to Senate Democratic leader Harry Reid.

Geithner has warned that failure to up the limit would have catastrophic economic consequences for the U.S. Republicans in Congress have linked the debt ceiling to broader fiscal reforms, and criticized Geithner for "sky-is-falling rhetoric."

Congress sets the national debt limit. Lawmakers have lifted the ceiling 10 times over the past 10 years, with the latest increase in February 2010.

As of Thursday, total public debt was $14.270 trillion, according to the Bureau of the Public Debt.

Treasury will provide another projection on the debt limit in early May.

If the debt limit isn't raised by May 16, Treasury has authority to take "certain extraordinary measures," Geithner said. The actions would be exhausted after about eight weeks.

"At that point, the Treasury would have no remaining borrowing authority, and the available cash balances would be inadequate for us to operate with a sufficient margin to meet our commitments securely," Geithner said in the letter.