House Ways and Means Committee Chairman Richard Neal, D-Mass., demanded Monday that the Trump administration tell Congress its plan for raising the federal debt limit.
“I am writing to request the Administration’s plans and timing to ask Congress for an increase in the debt limit to prevent a first-ever default on the full faith and credit of the United States,” Neal wrote in a letter to Treasury Secretary Steven Mnuchin, who oversees debt limit planning for the administration.
In the letter, Neal pressed Mnuchin for an estimate of the date at which the Treasury will risk defaulting on the federal debt if the debt limit is not increased.
Congress previously suspended the debt limit through March 1. After that, the Treasury Department will have to begin extraordinary measures to continue paying incoming bills without issuing more debt, in order to stay under the limit. Eventually, though, the Treasury would run the risk of failing to make a payment in full. Default would wreak havoc on financial markets.
“If the President chooses to engage in brinksmanship on the debt limit, as he did on the shutdown, the market reaction and the cost to our economy would likely be far larger than the 0.02 reduction in [gross domestic product] that [the Congressional Budget Office] attributed to the shutdown,” Neal continued.
