Treasury: Government will hit debt limit no later than May 16

Secretary Geithner letter asks Congress for action, projects most precise date yet for hitting ceiling.

The United States will hit its statutory debt limit no later than May 16 unless Congress votes to raise the $14.3 trillion debt ceiling, Treasury Secretary Timothy Geithner warned Senate Majority Leader Harry Reid, D-Nev., in a letter Monday afternoon.

Previously, Treasury had said the government might be able to continue until the end of May before it needed Congress to act. The dates are the most precise Treasury has offered yet on when the government would be unable to pay bondholders and borrow additional money.

The new announcement increases pressure on lawmakers to raise the debt ceiling, but many Republicans say they will not agree to any increase unless Democrats agree to substantial cuts in spending.

Geithner said Treasury can employ extraordinary measures to delay a debt default, but only until July 8.

In the letter, Geithner said failure to raise the limit would force the government to stop paying Social Security and Medicare benefits, tax refunds and military salaries. He said defaulting on the debt would provoke an economic crisis that could exceed the Great Recession.

"For these reasons," he wrote, "default by the United States is unthinkable."

Many Republicans have demanded dramatic steps to reduce long-term projected deficits in exchange for a vote to raise the ceiling.