It won't be topic number one for a few days, or even weeks, yet. But this is the week that the debt limit moves from abstraction to crisis. According to the Treasury Department's estimates, we will officially hit the debt limit on May 16th. No one anywhere thinks there's any chance that we'll pass an increase in the debt limit in the next few weeks. So, as of Friday, Geithner is beginning "extraordinary measures" to delay an actual default.

In a letter to Congress, Geithner detailed the first of these: "On Friday, May 6, Treasury will suspend until further notice the issuance of State and Local Government Series (SLGS) Treasury securities," he wrote. I'm not going to pretend to be an expert in SLGS securities, but their basic point is to help state and local government smooth out their finances. As Geithner writes, suspending them "is not without costs; it will deprive state and local governments of an important tool to manage their outstanding debt expenses." Sucks for them.

But there are only so many tricks that Geithner can pull out of his sleeve. Currently, Treasury is estimating that they can play games until about August 2nd, at which point we'll go from moving money around to defaulting on our debt. Of course, August 2nd is just a guess: it could be a bit later or, due to unforeseen circumstances or unexpected fiscal needs or market reactions, it could be a bit earlier. And there's always the chance that the spectacle of Congress bickering towards a default will cause the market to freak out even though we technically have a couple of weeks left. This is the Clint Eastwood theory of money management, in which Congress needs to ask itself, day after day, week after week, whether it feels lucky. And it's totally reckless and unnecessary.

Five in the morning

1) The Treasury is in emergency mode on the debt limit, reports Zachary Goldfarb: "Treasury Secretary Timothy F. Geithner said on Monday that he will begin to undertake emergency measures this week to avert a potential default on the federal debt. At the same time, he said, the United States now has until Aug. 2 to raise the legal limit on federal borrowing, 25 days longer than he had estimated last month. The reprieve is largely the result of higher tax revenues than anticipated. In a letter to Congress, the Treasury secretary renewed his warning that a failure to raise the $14.3 trillion debt limit 'would have a catastrophic economic impact.' But he also acknowledged that it could take weeks for Congress to vote to do so. Lawmakers on both sides of the aisle are demanding that any increase in the debt limit be accompanied by concrete steps to slow the growth of the debt."

2) Suddenly China, and not just the US, is worried about China's currency, reports Howard Schneider: "For years, the chief source of tension between the world’s two biggest economies has been Washington’s concern that China undervalues its currency to bolster trade. Suddenly, it’s become Beijing’s concern, too. Inflation is bubbling and consumer unhappiness is rising, as the price of imports chugs higher as measured in China’s currency, the yuan. At the same time, international investors are wary of the yuan because of the government’s close management of the currency. The result: a shift in the discussion inside the Chinese government, where advocates of export-led development have typically held sway. The change could make it tougher for those advocates to fend off U.S. pressure."

3) Obama's bump from killing bin Laden will be temporary if the economy doesn't tick up, reports Dan Balz: "When the history of the Obama presidency is finally written, the killing of Osama bin Laden will stand as one of the seminal moments and greatest accomplishments. What it may mean for President Obama’s 2012 reelection campaign and for the Republicans challenging him is more difficult to measure...The reasons have much to do with issues that have been and remain paramount in the minds of Americans: jobs, the economy, debt and deficits. As James Thurber, a political science professor at American University, put it in an e-mail message Monday, 'Jobs and the performance of the economy are still and will be the primary factors influencing 2012.'"

4) My take: Osama bin Laden's attack on us was largely economic, and it was more successful than many of us realize: "Did Osama bin Laden win? No. Did he succeed? Well, America is still standing, and he isn’t. So why, when I called Daveed Gartenstein-Ross, a counterterrorism expert who specializes in al-Qaeda, did he tell me that “bin Laden has been enormously successful”? There’s no caliphate. There’s no sweeping sharia law. Didn’t we win this one in a clean knockout? Apparently not. Bin Laden, according to Gartenstein-Ross, had a strategy that we never bothered to understand, and thus that we never bothered to defend against. What he really wanted to do — and, more to the point, what he thought he could do — was bankrupt the United States of America. After all, he’d done the bankrupt-a-superpower thing before. And though it didn’t quite work out this time, it worked a lot better than most of us, in this exultant moment, are willing to admit."

5) The current budget fight will be waged in the Senate more than the House, reports David Rogers: "The politics of this moment -- to avert default on the nation’s debt -- is fundamentally different from April’s threatened government shutdown. Down to the end, Boehner wanted a united GOP conference to pass that package, and it was something of a defeat that he needed scores of Democrats to fill the breach after conservative defections. The speaker can have no such illusions of a GOP-only debt deal, and this makes the Senate the better forum to test whether the two parties can come together. Both Obama and, more important, Vice President Joe Biden came up through the Senate, and nothing in the House matches the Senate’s bipartisan Gang of Six -- which has been meeting for months like Arthur’s Roundtable trying to keep alive the promise of last year’s deficit-reduction commission."

'80s cover interlude: Thao & Mirah play "Love Is A Battlefield" by Pat Benatar.

Got tips, additions, or comments? E-mail me.

Still to come: A Senate vote on the Ryan budget won't happen this week; rich people are paying a bigger share of taxes; the feds want to stop states from slashing Medicaid payments; our corporate tax rates will soon be the highest in the world, at least on paper; the Senate is ready to move on cutting oil subsidies; and a puppy tries, and fails, to say hello to a baby.

Economy

A Senate vote on Ryancare will have to wait, reports Erik Wasson: "A Senate vote on the House budget resolution authored by Rep. Paul Ryan (R-Wis.) 'probably' won’t happen this week, a Democratic aide told The Hill on Monday. Senate Majority Leader Harry Reid (D-Nev.) has vowed to force a vote on the Ryan budget in part because Democrats see a political advantage in getting Senate Republicans to go on the record supporting a resolution that calls for turning Medicare into a type of voucher system. Democrats hammered House Republicans on the vote during the two-week recess that just ended. Reid said on the Senate floor Monday that the Senate will first deal with a small-business bill and then with subsidies for oil companies before turning to the Ryan budget."

Rich folks are paying a bigger share of taxes, reports John McKinnon: "As President Barack Obama pushes to raise income taxes on high earners, opponents are seizing on data that indicates these U.S. households already pay a large and growing share of taxes, even compared with high-tax European countries. And a new congressional study concludes that the percentage of U.S. households owing no federal income tax climbed to 51% for 2009. Republicans are expected to highlight these figures at a congressional hearing Tuesday...For their part, Democrats note that the incomes of higher earners have been growing far more rapidly, so it's only natural that they would pay a higher share of tax. As for those Americans who pay no federal income tax, most of them still pay Social Security and Medicare payroll taxes that can take a significant share of their income, Democrats said."

The US' higher corporate tax rates have little to show for themselves, reports David Kocieniewski: "The United States may soon wind up with a distinction that makes business leaders cringe -- the highest corporate tax rate in the world. Topping out at 35 percent, America’s official corporate income tax rate trails that of only Japan, at 39.5 percent, which has said it plans to lower its rate. It is nearly triple Ireland’s and 10 percentage points higher than in Denmark, Austria or China. To help companies here stay competitive, many executives say, Congress should lower it. But by taking advantage of myriad breaks and loopholes that other countries generally do not offer, United States corporations pay only slightly more on average than their counterparts in other industrial countries."

Sen. Bob Corker's "CAP" proposal would force huge cuts even in good times, writes Heather McGhee: "Corker-McCaskill would limit total government spending -- including on Medicare and Social Security -- to a fixed percentage of gross domestic product...It's a depression maker. A policy device that automatically cuts government spending when GDP falls -- when our economy is weaker -- is a nifty gadget for turning recessions into depressions. This isn't a hypothetical consequence, either: In 1937, Franklin Roosevelt cut back spending, and the country slid back into the Great Depression. In 2010, the United Kingdom cut spending and zeroed-out its GDP growth. Had Congress been unable to inject new money into the economy in 2008, when the recession caused private businesses and households to cut back, we would have reached 11 percent unemployment."

Before they were famous interlude: Kristen Wiig and Melinda Hill as incompetent tooth fairies.

Health Care

It isn't a week in Congress if there aren't health care reform repeal votes, reports Ben Pershing: "The news of Osama bin Laden’s death may have consumed Capitol Hill Monday, but it didn’t alter House Republicans’ plans to continue their months-long quest to defund President Obama’s health-care plan. Unable to decapitate last year’s Patient Protection and Affordable Care Act, the GOP has decided instead to administer death by 1,000 cuts -- with two more cuts coming this week. On Tuesday, the House is scheduled to vote on a pair of bills: One would repeal funding from the health-care bill for states to establish insurance exchanges, and the other would repeal mandatory funding for school-based health center construction. The two measures -- expected to pass with near-universal Republican support -- are just the latest in a series."

Federal regulators are moving to stop states from slashing Medicaid, reports Robert Pear: "In a new effort to increase access to health care for poor people, the Obama administration is proposing a rule that would make it much more difficult for states to cut Medicaid payments to doctors and hospitals. The rule could also put pressure on some states to increase Medicaid payment rates, which are typically lower than what Medicare and commercial insurance pay. Federal officials said Monday that the rule was needed to fulfill the promise of federal law, which says Medicaid recipients should have access to health care at least to the same extent as the general population. 'We have a responsibility to ensure sufficient beneficiary access to covered services,' the administration said in issuing the proposal, to be published Friday in the Federal Register."

Health care reform is having a big impact on the job market for under-26ers, reports Michelle Andrews: "Adult children can now remain on their parents' plan until age 26, with few exceptions...The law applies to adult children whether or not they live at home or are financially independent. Even married children can stay on their parents' health policy until age 26. The biggest wrinkle for young adults: If they take a job whose benefits include health insurance, they can't choose to stay on their parents' plan. If that job offers good coverage, that's not a problem. But new grads often take entry-level or part-time jobs, which can come with limited-benefit plans that offer low coverage limits providing little protection if they actually get sick.

Adorable animals refusing to accept failure interlude: A dog repeatedly tries, fails to jump on a bed to see a baby.

Energy

The Senate is set for a vote on oil subsidies, reports Ben Geman: "Senate Majority Leader Harry Reid (D-Nev.) on Monday named the issue among his priority items for the upcoming several weeks before the Memorial Day recess. 'We will have the same debate in the Senate that the American people are having at home. That is the question of whether we should keep giving away money to oil companies who clearly don’t need taxpayer handouts,' he said, echoing comments last month in which he said, 'We need to take away the subsidies of the five major oil companies.' But efforts to end tax incentives - such as the lucrative manufacturing deduction that Levin’s plan targeted - face major barriers in the Senate and even bigger problems in the GOP-led House. Republicans and oil-state Democrats say nixing industry incentives would hinder domestic development."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

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May 3, 2011