US Treasury to take 'extraordinary measures' amid fiscal cliff deadlock

Last Updated: Thu, Dec 27, 2012 08:20 hrs

The US Treasury is set to take extraordinary measures to delay reaching a 31 December borrowing limit.

Treasury Secretary Timothy Geithner said it would take accounting measures to save about 200 billion dollars to prevent reaching the 16.4tn dollars borrowing limit.

Geithner said the extraordinary measures were needed to 'temporarily postpone the date that the United States would otherwise default on its legal obligations'.

The move comes as the so-called 'fiscal cliff' looms, the BBC reports.

According to the report, this is a round of tax increases and huge spending cuts due to come into force in January, but over which the Democrats and Republicans are stalled.

In a letter to Congress, Geithner said the 200 billion dollars would prevent the government from reaching the borrowing limit for about another two months.

On 1 January 2013, tax increases and huge spending cuts are due to come into force, the so-called fiscal cliff.

Deadline was put in place in 2011 to force president and Congress to agree ways to save money over the next 10 years.

President Barack Obama is expected to meet Republican leaders again to try to negotiate a solution, although no new date has been announced.

Failure to do so could damage the US and global markets, and threatens to send the US economy into recession, the report added. (ANI)

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