The U.S. government will reach its $16.4 trillion debt limit at the end of the year, according to latest estimates from the Treasury Department.

American_ClockThe U.S. government will reach its $16.4 trillion debt limit at the end of the year, according to latest estimates from the Treasury Department.

Congress will likely have until early 2013 to actually craft a deal to hike the limit before the government exhausts its ability to borrow. The Treasury said it can employ “extraordinary measures” that would free up cash and keep the government funded for a few more months. The nation’s debt currently stands at $16.199 trillion.

“We continue to expect that these extraordinary measures would provide sufficient ‘headroom’ under the debt limit to allow the government to continue to meet its obligations until early in 2013,” said Matthew Rutherford, the Treasury’s assistant secretary for financial markets.

The timeline sets the stage for what could be another bruising battle of the U.S. Congress.

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Source: Peter Schroeder | The Hill