Senate Majority Leader Harry Reid's (D-Nev.) office walked back his remarks Thursday, after he suggested the debt limit could be dealt with months after the deadline set by Treasury Secretary Jack Lew.
Reid’s puzzling remarks came hours after Lew said Congress would need to raise the borrowing limit by the end of February to prevent a federal default.
Asked about the borrowing cap by reporters, Reid called the matter “not urgent.”
“We keep getting different numbers on that, but we think sometime in May, it will be necessary,” he said.
He added that the limit might need to be dealt with in April, but Congress would assuredly tackle it before then if necessary.
Shortly after Reid made his remarks, his spokesman sought to clarify them, emphasizing that Reid agreed with Lew on the urgency of the matter.
The latest Lew has been willing to entertain a debt-limit fight was early March. A slew of tax refunds going out, as well as less potent “extraordinary measures” to buy time, means the government would have just a few weeks to avoid a potential default, after the debt limit goes back into effect after Feb. 7, according to the Treasury.
Speaking at the Council on Foreign Relations Thursday morning, Lew said the drop-dead deadline would be coming sooner rather than later, and called on Congress to pass an increase as soon as possible.
“If Congress is looking at the numbers the way we are, and we have the best data, they would see we’re looking [a deadline] more at the end of February than anytime in March,” he said.
Outside analysis by the Bipartisan Policy Center, which tracks the debt limit closely, also estimates a borrowing boost would be needed by early March at the latest.
Speaker John Boehner (R-Ohio) was also asked about debt-limit timing Thursday, as many Republicans have publicly challenged Lew’s past timelines surrounding the borrowing cap. But Boehner said he had no timeline in mind, adding he too wanted to deal with it in a timely fashion.
“I don’t have an estimate of when we’re going to reach the debt limit,” he told reporters. “All I know is that we should not default on our debt; we shouldn’t even get close to it.”
Boehner added he hoped Congress could “quickly” move on a bill to boost the debt limit but did not say what such an increase would look like.
Republicans have said they will want to extract some sort of fiscal concessions in exchange for a debt-limit increase, while the White House has underlined its stance that it will not negotiate over a matter so important. Reid backed that position on Thursday.
Congress agreed to suspend the debt limit as part of the October deal to end the government shutdown. The limit will be reimposed on Feb. 8 and automatically increased to cover all government borrowing that happened in the meantime. At that time, the Treasury will deploy its “extraordinary measures” to free up funds under the cap and keep current on the government’s bills.
However, Lew has warned that, while those measures had bought Congress months to negotiate in the past, it would likely only be weeks this time around.
The inherent uncertainty about government cash flow around tax time, as well as the reduced strength of the measures, creates a much shorter time frame before a potential default, Lew has warned.
— Russell Berman and Erik Wasson contributed to this report.