Finance

Mnuchin asks Congress to raise debt ceiling ‘as soon as possible’

Greg Nash

Treasury Secretary Steven Mnuchin on Monday urged congressional leaders to raise the federal debt limit “as soon as possible” as the department begins accounting maneuvers to prevent a default.

Mnuchin wrote in a March 4 letter to top lawmakers that the Treasury Department had begun a “debt issuance suspension period” to avoid missing a debt payment, and asked for swift action to raise the cap on federal debt.

“I respectfully urge Congress to protect the full faith and credit of the United States by acting to increase the statutory debt limit as soon as possible,” Mnuchin wrote to Speaker Nancy Pelosi (D-Calif.) and seven other congressional leaders.{mosads}

The recipients include House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Charles Schumer (D-N.Y.), and the chairmen and ranking members of the Senate Finance Committee and House Ways and Means Committee.

The legal limit on how much the federal government can owe creditors, known as the “debt ceiling,” was reimposed Saturday after a one-year suspension ran out on March 2. The Treasury Department has begun a series of financial and accounting moves called “extraordinary measures” to prevent the U.S. from breaching the debt ceiling.

Those maneuvers should give lawmakers and President Trump until September to reach a deal, according to recent estimates, though the exact deadline is uncertain.

Members of both parties are eager to prevent the U.S. from defaulting on its debt, which could trigger a global economic meltdown. Even so, it’s unclear how party leaders plan to raise the debt ceiling and whether it will be entangled in testy government funding negotiations.

Mnuchin wrote in the Monday letter that Treasury had halted investments in certain benefits funds for federal workers and retirees to avoid exceeding the debt limit. The secretary said federal employees and retirees who receive benefits from those funds should be unaffected.

Tags Charles Schumer Donald Trump Kevin McCarthy Mitch McConnell Nancy Pelosi Steven Mnuchin

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