By Peter Schroeder - 07/15/11 08:25 PM EDT
The Treasury Department announced Friday it has exhausted its options to free up room under the national debt limit.
The administration is suspending reinvestments in an emergency reserve fund called the Exchange Stabilization Fund — its fourth and final "extraordinary action" to free up cash under the $14.3 trillion debt ceiling.
According to the Treasury, that means the government is out of moves to navigate around the debt limit, leaving the only option a lawmaker-approved boost to that limit.
The government reached the debt limit back on May 16, but the Treasury has been able to keep the government current on its obligations by employing so-called "extraordinary actions." However, the Treasury has maintained that it will not be able to meet government obligations beyond Aug. 2, so Congress will need to approve — and the president will need to sign — a debt-limit increase by then.
Policymakers have yet to come to an agreement over a deficit-reduction plan that will be paired with any boost to the debt limit. Republicans are set to vote on a "Cut, Cap and Balance" plan in the House next week.