Debt Ceiling May Be Reached Sooner Than Expected
If you doubt Donald Trump's ability to bankrupt the government, understand that bankruptcy is perhaps the only area in which he has excelled
— John Iadarola (@johniadarola) April 26, 2017
Mick Mulvaney, the Director of the Office of Management and Budget, spoke to Congress on Wednesday, warning them that they may have to raise the debt ceiling sooner than they expected.
Mulvaney told the House Budget Committee:
“My understanding that the [tax] receipts, currently, are coming in slower than expected and you may soon hear from Mnuchin [Treasury Secretary] about a change in the date. We look forward to working with the Hill on the best way to go about this.”
Treasury Secretary Steven Mnuchin repeated these concerns to the House Ways and Means Committee members later that afternoon:
“I urge you raise the debt limit before you leave for the summer.We can all discuss how we cut spending in the future and deal with the budget going forward.”
The government’s borrowing limit may need to be raised earlier than originally anticipated https://t.co/2GdgYycUgV
— MarketWatch (@MarketWatch) May 25, 2017
The Treasury Department Trying To Avoid Devastating Default
The Treasury has employed some out-of-the-ordinary cash management measures so that the government can continue borrowing funds while staying under the $19.8 trillion limit. These measures include stopping sales of securities to state and local governments and halting investments in federal employee pension funds.
The most conservative Republican group in Congress, the House Freedom Caucus, issued a statement on Wednesday saying they insist on further cuts to the budget before it will approve an increase in the debt limit:
“We have an obligation to the American people to tackle Washington’s out of control spending.”
Mnuchin went on to warn the Committee that Congress and the administration are free to discuss future spending cuts, but it was “absolutely critical” to preserve U.S. creditworthiness by paying debts already incurred.
Per the Washington Post:
“President Trump will have to deploy “extraordinary” measures in two weeks to avoid a default on the debt if Congress does not move to raise the federal borrowing cap, a little-recognized deadline that could expedite his showdown with Congress over taxes and spending.”
Featured image from YouTube video.
