US Treasury expects govn't to hit debt limit before 2013

The Treasury Department said Wednesday it expected the federal government to hit its debt ceiling near the end of this year. "Treasury continues to expect the debt limit to be reached near the end of 2012. However, Treasury has the authority to take certain extraordinary measures to give Congress more time to act to ensure we are able to meet the legal obligations of the United States of America," the Treasury said in a statement. It said those measures would provide sufficient "headroom" under the debt limit to allow the government to continue to meet its obligations until early 2013. The Treasury figures showed total outstanding U.S. public debt topped 16 trillion dollars in September. It is currently about 200 billion dollars below the 16.4 trillion legal limit the government is allowed to borrow. Negotiating a lift in the debt limit will complicate the fiscal issues facing the Obama administration and Congress. They need to strike a deal if they are to avoid the so-called fiscal cliff, about 600 billion dollars in tax hikes and spending cuts which are scheduled to kick in at year's end. The Treasury also announced a 72 billion dollars offering of its 3-year, 10-year and 30-year debt securities to refund approximately 63.1 billion dollars of maturing securities, which will raise 8.9 billion dollars of new cash. It said it is still planning to develop a floating rate note (FRN) program to complement the existing suite of securities issued, but the first FRN auction is estimated to be at least one year away.