It’s difficult to pinpoint exactly when the country will again max out its credit card. | REUTERS Debt ceiling battle tab: $1 billion-plus

Remember that nasty and protracted fight to raise the nation’s debt ceiling last summer?

It cost taxpayers a pretty penny: $1.3 billion.


That’s how much the government paid to cover additional costs of borrowing money during the epic debt battle that dominated Washington last summer, as investors grew jittery over the delay. That uncertainty led to higher borrowing costs for the federal government, according to a Government Accountability Office report released Monday.

“Delays in raising the debt limit can create uncertainty in the Treasury market and lead to higher Treasury borrowing costs,” the watchdog agency said. “GAO estimated that delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011.”

But the GAO warned that the borrowing costs could go even higher, since the report doesn’t account for Treasury liabilities that are still outstanding.

The Treasury Department had to take a number of extraordinary measures – such as delaying payments to various retirement and benefits funds – in order to buy Congress more time to work out a debt deal. The debt limit was finally increased in August following the passage of the Budget Control Act, which cut spending by $2.1 trillion and increased the debt limit in multiple phases.

Though it’s difficult to pinpoint exactly when the country will again max out its credit card, Treasury Secretary Timothy Geithner said he expects the nation to reach the limit before the end of the year. But the actual deadline may not be until 2013 since Treasury can again enact extraordinary measures.

The current debt limit stands at $16.4 trillion, while the United States holds more than $15.87 trillion of debt.

Rep. Sander Levin (D-Mich.), the top Democrat on the tax-writing Ways and Means Committee, noted Monday that House Republicans have again pledged to tie spending cuts to any debt-limit hikes – a call that Democrats have characterized as another round of fiscal brinksmanship.

“The cost of last summer’s recklessness by Republicans only continues to grow, yet they seem eager to do it all over again,” Levin said in a statement. “It is time for Republicans in Congress to end their constant turn toward rigid ideology and begin learning how to govern.”

When asked by reporters for a response on the report, House Majority Whip Kevin McCarthy (R-Calif.) said there needs to be “accountability” on the debt-ceiling issue.

“One thing I found on the debt ceiling, and one of the things that created most of the uncertainty, is the president didn’t want to have any type of debt ceiling discussion in an election year,” McCarthy said Monday. “He was more focused on politics, [it’s] what he’s doing in the tax policy right now as well.”

Jake Sherman contributed to this report.

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