Treasury Secretary Lew urges Boehner to raise debt limit ASAP
In letter to House Speaker John Boehner yesterday, Treasury Secretary Jack Lew urged Congress to increase the debt limit “at the earliest possible moment” before the Feb. 7, 2014 deadline to avert default.
The United States will reach its debt ceiling in early February unless Congress votes to increase the Treasury’s borrowing authority. Otherwise, the U.S. government would face a cash shortfall, meaning that it may not be able to pay all the bills incurred by Congress on time.
Lew is asking Congress to raise the debt ceiling “well before February 7, 2014” because the Treasury’s extraordinary measures will only be able to avert default for a few more weeks – until late February or early March – due to the outflow of cash to pay for tax refunds.
“We do not foresee any reasonable scenario in which the extraordinary measures would last for an extended period of time – principally because the government experiences large net cash outflows in February and March due to tax refunds,” Lew wrote.
Since 2011, Republicans in Congress have used threat of default as political leverage to force steep cuts in the federal budget. When this occurred in August 2011, the U.S. credit rating was downgraded for the first time ever; the threat of default also sent the stock market into a tailspin that summer.
Most recently, House Republicans tried to use the threat of default during the government shutdown to force the President and Democrats to repeal or delay the implementation of the Affordable Care Act.
Lew warned Congress against using the debt limit to exact political gains again, arguing that such tactics will hurt the economic recovery.
“The creditworthiness of the United States is an essentially underpinning of our strength as a nation; it is not a bargaining chip to be used for partisan political ends. Moreover, as you know, increasing the debt limit does not authorize new spending commitments. It simply allows the government to pay for expenditures Congress has already approved,” wrote Lew. “The American public expects leaders to put an end to governing by crisis and to focus on promoting economic growth and job creation.”
- Treasury.gov: Letter from Jack Lew to John Boehner – Dec. 19, 2013 (PDF)
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