Treasury Secretary Geithner: US Will Reach Legal Debt Limit by May 16th

May 16th - mark that day down on your calendars.

According to Treasury Secretary Timothy Geithner, the United States will hit its legal debt limit of $14.29 trillion by "no later than" May 16th. This is, of course, unless Congress decides to raise the debt limit before then.

What happens if the legal debt limit hasn't been raised by the time that the country accumulates $14.29 trillion in total outstanding debt? According to Geithner, the country has a "toolkit of emergency measures" that could provide "up to eight weeks of additional borrowing room". This additional borrowing room would likely run out by July 8th.

A battle has been raging between Democrats and Republicans for months now regarding the country's debt limit. Many Republicans want to see spending cuts enacted before the debt limit in the country is raised.

It should be noted that the debt limit was raised multiple times during President George W. Bush's time in office.

Nobody actually thinks that the country will default on its debt, but there should still be an interesting showdown between now and May 16th. Which party will blink first?

Source: Bloomberg.com - Geithner Says U.S. To Reach Debt Limit No Later Than May 16