BREAKING NEWS

US could hit debt ceiling again around election

By REUTERS

JANUARY 20, 2012 08:32

WASHINGTON - The latest $1.2 trillion increase in the US debt limit may not last through November's election and could provide fresh ammunition for Republicans to attack US President Barack Obama on what they see as a particularly vulnerable point - spending.

Based on current deficit rates and borrowing estimates, some analysts say the United States could reach the debt ceiling again before the Nov. 6 vote. This would force the US Treasury to turn once more to accounting maneuvers to avoid the unthinkable: asking Congress for another increase as the presidential election campaign reaches its crescendo.

But any moves by the Treasury would likely not stop the issue from becoming fodder for Republican attack ads.

Estimates on when the United States will reach its debt limit vary, but they leave little room for the Treasury to cope with an economic shock, such as a global slowdown triggered by a worsening of Europe's debt crisis, which could shrink US revenues and boost spending on unemployment aid.

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