Steven Mnuchin

Treasury Department Issues Reminder About Debt Limit Deal Expiration

“They are going to be in a crisis within weeks. The debt ceiling was suspended arbitrarily until March 15. When it comes back into effect there will be $20 trillion of debt. And before they can do anything on all of this stimulus they’re talking about they’re going to have to raise the debt ceiling and where are the votes going to come from? It’s going to make 2011, if you remember the debt ceiling crisis in 2011, look like a Sunday school picnic. We’re in bad shape.”

-David Stockman, Director of the Office of Management and Budget under President Reagan, speaking on the FOX Business Channel on January 25, 2017

Last Wednesday, the U.S. Department of the Treasury issued the following reminder about the March 15 expiration of the debt limit deal reached two years ago. From a press release on their website:

The debt limit places a limitation on the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments. The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.

The Bipartisan Budget Act suspended the debt limit through March 15, 2017. If Congress fails to increase or further suspend the debt limit by March 15, Treasury can take certain extraordinary measures to continue to finance the government on a temporary basis.

Extraordinary measures will allow the government to continue to meet its obligations for a period of time after March 15. That said, it is impossible to provide a precise forecast as to how long the extraordinary measures will last. Treasury will provide greater clarity at a later date regarding how long extraordinary measures will allow Treasury to continue to borrow…

(Editor’s note: Bold added for emphasis)

So how is this setting up for the next couple of weeks?

According to MarketWatch’s Greg Robb on on February 1:

During the Obama administration, Republicans in Congress sought to use the debt limit vote to force spending cuts.

Treasury Secretary nominee Steven Mnuchin said he would like to see Congress act to raise the debt limit “sooner rather than later.”

But Trump’s choice to head the Office of Management and Budget, Mick Mulvaney, was a leader of the House Republican effort to use the debt limit vote as a lever to reign in spending…

(Editor’s note: Bold added for emphasis)

Stay tuned folks…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Robb, Greg. “Raising the debt ceiling is now Trump’s problem. MarketWatch. 1 Feb. 2017. (http://www.marketwatch.com/story/raising-the-debt-ceiling-is-now-trumps-problem-2017-02-01). 7 Feb. 2017.

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Tuesday, February 7th, 2017 Debt Crisis, Fiscal Policy, Government, Political Parties, Spending, Stimulus Comments Off on Treasury Department Issues Reminder About Debt Limit Deal Expiration
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