Treasury Secretary Timothy F. Geithner said his department will take “extraordinary measures” to postpone a U.S. default for about two months while President Barack Obama and Congress work out a deficit-reduction deal.

Geithner, in a letter to congressional leaders Wednesday, said the government will hit its statutory debt ceiling on Dec. 31. To avert a default, the Treasury will take action to create about $200 billion in headroom under the debt limit.

“However, given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures,” Geithner said.

Geithner’s letter adds urgency to talks between Obama and congressional Republicans on a deficit-reduction plan. Obama has asked that raising the debt ceiling be part of that plan.

Obama and Congress both return to Washington Thursday after an abbreviated Christmas holiday to circumvent a deadline that would trigger more than $600 billion in tax increases and spending cuts that might cause a U.S. recession.

House leaders, who were forced last week to withdraw their latest proposal before it could face a vote, on Wednesday called on the Senate to act next.

They said the Senate should amend bills passed by the House earlier this year include a one-year extension of tax cuts for all income levels.

Boehner Statement

“Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments,” said House Speaker John Boehner, an Ohio Republican, in a statement together with Majority Leader Eric Cantor of Virginia, Majority Whip Kevin McCarthy of California and the head of the Republican conference, Cathy McMorris Rodgers of Washington.

Boehner and Obama have been unable to agree on the tax-rate increase on top earners Obama wants or the cuts to entitlement programs that Boehner sought, complicating the chances of getting a package done.

Both parties have begun work on minimal deficit-reduction proposals, aimed at avoiding the automatic tax increases and spending cuts while a bigger package is negotiated.

“At this point, all they’re looking for is a fig leaf,” said Stan Collender, a former staff member of the House Ways and Means Committee and the House and Senate Budget committees who is now at Qorvis Communications in Washington. “There’s no grand bargain. There never was.”

Small Deal

The trouble is that Senate Majority Leader Harry Reid, a Nevada Democrat, and Minority Leader Mitch McConnell, a Kentucky Republican, need to come up with something that also can get through the House, which has balked at any tax increases. Senate Republicans don’t want to be on the record supporting higher taxes unless they know the House also would pass it.

“There’s still a chance for them to get a deal,” said Ron Bonjean, a Republican strategist who once served as a spokesman for former House Speaker Dennis Hastert of Illinois and former Senate Majority Leader Trent Lott of Mississippi. “It grows more unlikely by the day, and there’s not a lot of days left.”