U.S. Expected to Hit Debt Ceiling Limit SoonMarch 11, 2015
On March 6, Treasury Secretary Jacob Lew sent a letter to House Speaker John Boehner (R-Ohio) urging him to raise the debt limit as soon as possible, as the debit limit’s suspension is set to expire on March 16.
In February 2014, Congress passed the Temporary Debt Limit Extension Act which suspended the statutory debt limit through March 15, 2015, and allowed the government to take on any new debt it needed to fund federal operations. In the last year, the national debt rose from approximately $17.4 trillion to $18.1 trillion.
Beginning on Monday, March 16, the outstanding debt of the U.S. will be at the statutory limit unless Congress acts. Only Congress is empowered to increase the nation’s borrowing authority and Lew said that beginning on Friday the Treasury Department will begin taking “extraordinary measures” to continue financing the government. The Treasury will suspend the issuance of State and Local Government Series (SLGS) securities, which are given to states and municipalities to help them conform to certain tax rules. When Treasury issues SLGS, they count against the debt limit. According to the Congressional Budget Office (CBO) the Treasury Department will likely exhaust its “extraordinary measures” to starve off the need for new borrowing authority by October or November.
Although once a relatively routine matter, lawmakers have voted three times since 2013 to suspend the debit limit. House Minority Leader Nancy Pelosi (D-Calif.) has urged lawmakers to move quickly to prevent a default, but in the past some conservatives have wanted fiscal restraints in exchange for passage. Senate Majority Leader Mitch McConnell (R-Ky.) has indicated that Senate Republicans would pass legislation this week to raise the debt ceiling before the U.S. defaults on its national debt on March 15.