Steven Mnuchin ruled out any attempts to circumvent or game the federal debt ceiling Thursday, saying at his confirmation hearing that he would lobby to raise it if he is confirmed as treasury secretary.
“I would like us to raise the debt ceiling sooner rather than later,” Mnuchin told Sen. Michael Bennet, D-Colo.
During the Obama years, congressional Republicans tried to attach spending cuts to legislation raising the debt ceiling. In staredowns with the Obama administration in 2011 and 2013, the Treasury came within days of risking missing a payment before Congress voted to raise the debt ceiling, allowing the Treasury to issue new debt and use those funds to pay incoming bills.
Mnuchin indicated that he won’t indulge that tactic, declaring, “I firmly believe the U.S. has the obligation to honor its debt.”
“I will commit to absolutely work with the Congress … so that we won’t wait ’til the last minute and run out of money,” he said.
The Trump administration’s approach to the debt ceiling has been a topic of controversy among Democrats. Mick Mulvaney, Trump’s pick for budget director, has suggested that the Treasury could management payments to avoid missing a payment on interest or principal on the debt even if the ceiling were not raised. Congressional Republicans have introduced legislation requiring the Treasury to prepare to do that.
The Obama administration, with previous administrations of both parties, has maintained that it is not feasible to prioritize among payments without precipitating a crisis.
Raising the debt ceiling will be an early test for the Trump administration. Currently suspended, it will be reinstated in March at just above $20 trillion.
