Congress narrowly avoided taking the Department of Homeland Security off a cliff this week, but they’re heading right back to the edge with the debt limit deadline looming.
That was the warning Treasury Secretary Jack Lew gave Friday in a letter to Speaker John Boehner officially asking Congress to raise the borrowing cap for the nation’s $18 trillion debt, which the government will hit on March 16.
“Absent an increase in the debt limit, the Treasury Department will have to take extraordinary measures to continue to finance the government on a temporary basis,” Lew wrote.
The Congressional Budget Office this week predicted the Treasury could avoid a missed payment on its debt by taking those “extraordinary measures” through as late as this fall.
Congress has been careening from crisis to crisis over the debt limit since Republicans first suggested using a vote to raise the limit as leverage to secure concessions on spending cuts in 2011. In 2013, Congress came close to or surpassed the debt limit multiple times, offering only short-term solutions until February of 2014, when the debt limit was increased through the upcoming deadline just weeks from now.
Republicans have long dismissed the severity of hitting the debt limit, arguing that the government can reprioritize payments to make sure all essential operations continue past the deadline. But economists and administration officials say the frequent fights impact the U.S. economy, and both the 2011 and 2013 crises caused credit rating agencies to reevaluate the U.S.’s creditworthiness.
Lew tries to preempt yet another battle in his letter, writing that “increasing the debt limit does not authorize new spending commitments. It simply allows the government to pay for expenditures Congress has already approved, thereby protecting the full faith and credit of the United States.” And he hints that another political battle over the limit could be damaging.
“Only Congress is empowered to increase the nation’s borrowing authority, and I hope that Congress will address this matter without controversy or brinksmanship,” he writes.