The U.S. Treasury Department is estimated to have enough authority to continue borrowing through “at least mid-February” 2013, the Congressional Budget Office said in a report today that will affect the negotiations over the fiscal cliff.
The U.S., with $16.3 trillion in debt, is nearing the $16.4 trillion debt ceiling and Congress must act to raise it. CBO’s estimate assumes that Treasury will use a series of “extraordinary” steps, as it has done in the past. The estimate, CBO said, is subject to adjustment based on actual revenue collections and payments.
“Given the magnitude of the government’s daily cash flows and uncertainty about the size of certain key transactions over the next few months, it is difficult to be precise about the date on which the Treasury will lose its authority to borrow additional funds,” the report said.
The Treasury Department has said publicly only that it expects to use up the extraordinary measures by early 2013.
Lawmakers have been sparring over how to address the debt limit as part of the fiscal cliff, the more than $600 billion in automatic tax increases and spending cuts scheduled to take effect in January.
Democrats want the debt-limit increase to occur as part of an agreement to avert the fiscal cliff.
Jay Carney, the White House press secretary, said yesterday that he expected that Congress would increase the limit “without drama.”
House Speaker John Boehner, an Ohio Republican, today reiterated his condition for increasing the debt limit. Any increase, he said, should be accompanied by an equal cut in spending.
“If we’re going to talk about the debt limit in this,” he said, “there’s going to be some price tag associated with it.”
Lawmakers went right up to the deadline in August 2011 before agreeing to the latest increase in the debt limit. The agreement included caps on domestic spending and set up $1.2 trillion in automatic spending cuts, half in defense programs, scheduled to begin in January.
Representative Sander Levin of Michigan said in a statement that the 2011 episode caused the country economic harm.
‘Loud and Clear’
“The American people spoke loud and clear that they are tired of Republicans manufacturing crisis after crisis and hurting the American economy in the process,” said Levin, the top Democrat on the House Ways and Means Committee. “It’s time for Republicans to start acting like the adults that Americans want them to.”
The U.S. staved off hitting the debt limit until August of last year by taking what Treasury Secretary Timothy F. Geithner called “extraordinary measures” that included declaring a “debt-issuance suspension period” under the statute governing the Civil Service Retirement and Disability Fund. That allows the U.S. to redeem existing Treasury securities held by that fund as investments.
The Treasury also stopped issuing State and Local Government Series securities. The bonds, known as SLGS, help fund expenditures such as infrastructure projects.
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