Geithner gives Congress notice: Four to six weeks until default

Treasury Secretary Tim Geithner in a letter to House Speaker John Boehner and other congressional leaders:

Dear Mr. Speaker:

I am writing to provide additional information regarding the extraordinary measures Treasury has undertaken in order to avoid default on the nation's obligations.

Treasury currently expects to exhaust these extraordinary measures between mid-February and early March of this year.  We will provide a more narrow range with a more targeted estimate at a later date.  Any estimate, however, will be subject to a significant amount of uncertainty because we are entering the tax filing season, when the amounts and timing of tax payments and refunds are unpredictable.  For this reason, Congress should act as early as possible to extend normal borrowing authority in order to avoid the risk of default and any interruption in payments.

If the extraordinary measures were allowed to expire without an increase in borrowing authority, Treasury would be left to fund the government solely with the cash we have on hand on any given day.  As you know, cash would not be adequate to meet existing obligations for any meaningful length of time because the government is currently operating at a deficit.

The letter goes on to discuss the ramifications of default and to explain why America's full faith and credit should never be taken hostage, but the key news here is that Congress now has a more concrete deadline'a deadline not for when we're going to hit the debt limit (we've already hit it) but for when the administration says it will no longer be able to easily bail Congress out from its failure to act. And now, as President Obama said today, it's Congress's turn to act.