Treasury Secretary Jack Lew on Friday initiated the first move in what is likely to be a long and contentious showdown over the federal debt ceiling, calling on House Speaker John Boehner to lift the limit before March 16, when it becomes binding.
“I respectfully ask Congress to raise the debt limit as soon as possible,” Lew said in a letter to Boehner dated Friday.
Congress suspended the debt limit in a deal last February, with the federal debt at $17.2 trillion.
The suspension ends on March 15, and the new limit will be whatever the national debt is on Monday, March 16, meaning that the limit will be binding on that day.
The Congressional Budget Office estimated this week that the debt subject to the limit is now roughly $18.1 trillion.
After March 16, the Treasury will be able to avoid default by effectively moving money around in federal accounts. It has enough “extraordinary measures,” which have been used routinely in debt limit fights in recent years, to continue paying the government’s debts into October or November, the Congressional Budget Office projected.
At that point, the Treasury would run the risk of missing or delaying a payment on government bonds or any of the countless government bills that come due on a weekly basis.
Although in past episodes Republicans and the Obama administration have negotiated over taxes and spending right up until the last days before the government risked default, Lew asked Boehner Friday to avoid a similar showdown this fall.
“Increasing the debt limit does not authorize new spending commitments. It simply allows thegovernment to pay for expenditures Congress has already approved, thereby protecting the fullfaith and credit of the United States,” Lew said. “Only Congress is empowered to increase the nation’sborrowing authority, and I hope that Congress will address this matter without controversy orbrinksmanship.”
