WASHINGTON – Treasury Secretary Jacob Lew is telling Congress the steps he will be taking once the federal government hits the debt limit on Monday.
Lew took the first step Friday by suspending issuance of special Treasury securities that are used by state and local governments. He said that on Monday he will stop making investments in a pension fund for government employees.
The nation’s current debt stands at $18.1 trillion. Over the past year, the government has been able to borrow as much money as it needs to finance operations because Congress had suspended the debt limit.
However, the debt limit will go back into effect on Monday at the level where debt is currently. After that, Lew can employ various emergency measures to keep from going over the limit.
The Congressional Budget Office in a report last week estimated that the various measures Lew can employ could put off the date the debt ceiling will have to be raised until October or November.
Lew included a description of the various measures he can use along with his letter. The fact sheet said that suspending the issuance of debt investments in the Civil Service Retirement and Disability Fund would free up $20 billion in headroom for the government to sell regular Treasury securities over the next three months.
In his letter Friday, Lew urged Congress to move to raise the debt limit as quickly as possible.
“The creditworthiness of the United States is not a bargaining chip and I again urge Congress to address this matter without controversy or brinksmanship,” Lew said.
Republicans now control both the House and the Senate. More conservative GOP lawmakers would like to use the need to raise the borrowing limit as leverage to force President Barack Obama to change his policies in such areas as health care and immigration.
But Senate Majority Leader Mitch McConnell, R-Kentucky, said in a television interview Sunday that he remained firm in his view that the GOP should not employ such tactics.
“I made it very clear after the November election that we’re certainly not going to shut down the government or default on the national debt,” McConnell said on CBS’ “Face the Nation.”
McConnell did suggest that Republicans may try to get some policy initiatives passed by attaching the proposals as part of legislation to raise the debt ceiling.
“We’ll figure some way to handle it and hopefully it might carry some other important legislation that we can agree on in connection with it,” he said.
It was a standoff over the debt limit in August 2011 that prompted the first ever downgrade of the nation’s credit rating by Standard & poor’s and in October 2013, there was a 16-day partial government shutdown.