Debt Ceiling Musical Chairs to End Mid October

Tuesday, August 27th, 2013 and is filed under Blog, Debt, News

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When Republicans summarily decided to “suspend” the debt ceiling law at the end of January many conservatives were scratching their heads.  Why would Republicans completely avoid using the debt ceiling as leverage to promote our priorities and shrink government?

Well, among the many lies that were told to us at the time was the following too-clever-by-half pearl of wisdom.  Leadership aids contended that by suspending the law until May 18 instead of raising the debt ceiling by a dollar amount, the Obama administration would not have the ability to create a contrived panic deadline.  The only problem with this plan was that it failed to take into account that the Treasury could still employ “extraordinary measures” to forestall the final debt ceiling deadline.  Coupled with the new tax money pouring into the Treasury as a result of the McConnell tax hikes, Jack Lew was able to push off that date indefinitely.

Not surprisingly, he is setting his own deadline just two weeks after the CR expires:

Treasury Secretary Jacob J. Lew announced in a letter circulated publicly shortly after the stock markets closed Monday that in mid-October, the Treasury would exhaust the “extraordinary measures” to keep the government from overextending its borrowing authority.

“At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day. The cash balance at that time is currently forecasted to be about $50 billion,” Lew wrote.

The upcoming spending debates on Capitol Hill will almost converge, setting up a tough slog in September and October.