U.S. to Hit Debt Limit in Late February

Next standoff over federal debt ceiling will come earlier than expected

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Evan Vucci / AP

Treasury Secretary Jacob Lew arrives on Capitol Hill to testify before the Senate Banking Committee on May 21, 2013

Treasury Secretary Jack Lew has told Congress the U.S. will run out of accounting gimmicks to keep financing the government in late February, setting the stage for another debt-ceiling standoff slightly earlier than expected.

“When I previously wrote to you in December, I estimated that Treasury would exhaust extraordinary measures in late February or early March,” Lew wrote in a letter to lawmakers released on Wednesday afternoon. “Based on our best and most recent information, we believe that Treasury is more likely to exhaust those measures in late February.”

The U.S. is scheduled to hit the debt limit on Feb. 7, but the Treasury Department has the ability to juggle its obligations for some time after. Lew’s estimate shortens the timetable for another partisan squabble over lifting the federal debt limit. Since Republicans gained control of the House in 2010, they have used the periodic extensions of U.S. borrowing authority as a point of leverage to seek policy concessions, despite warnings of economic calamity if the debt ceiling were breached.

(MORE: 4 Reasons We Haven’t Seen the Last of the Fiscal Cliff)

Republicans have yet to map a public strategy for how to approach the debt-ceiling deadline this time. The party has been hesitant to take up battles that would distract from the bumpy rollout of President Obama’s health care law, which the GOP believes will be the dominant issue in November’s midterm elections. In December, Obama reiterated his vow not to haggle over the debt limit. “No, we’re not going to negotiate with Congress to pay the bills that it has accrued,” he said at a year-end press conference.

But House Speaker John Boehner’s office dismissed on Wednesday the possibility that Congress would raise the debt limit without concessions. “The Speaker has said that we should not default on our debt, or even get close to it, but a ‘clean’ debt-limit increase simply won’t pass in the House,” Boehner spokesman Michael Steel said. “We hope and expect the White House will work with us on a timely, fiscally responsible solution.”

That may portend the kind of fight that the Obama Administration is eager to avoid. “I respectfully urge Congress to provide certainty and stability to the economy and financial markets by acting to raise the debt limit before Feb. 7, 2014, and certainly before late February,” Lew wrote.

35 comments
Onepatriot
Onepatriot

The Republicans have done everything they can think of to hold back the economy and using the debt ceiling to get concessions is just one more vindictive way they have to attack this President.    Let me guess, again they will claim the programs that help the middle and lower classes have to cough it up. 

I want to see more reforms. Renew the food stamp program and give less subsidies to oil and dairy.  The dairy industry is selling more butter now that trans fats are out, so they're not hurting.    Give less payments to hospitals for robotic surgeries that can be done the traditional way.  More accountability from hospital administrators.  Maybe they could take their million dollar salaries down a notch.  Raise the Federal Minimum Wage to $10.00 an hour and see how it helps the economy.  More tax revenue will be brought in which will help in lowering the debt ceiling.

janedspa
janedspa

Why are they trying to rewrite history books? Samual adams formed the COMMITTEES OF CORRESPONDENCE so the americans could spread word of what was happening between the colonies and they could unite against England…..what happens if the americans now were to do the same?

MichaelWhitehead
MichaelWhitehead

I still maintain that the solution is relatively simple.  Not easy to accomplish in the current political climate, but still simple.  Return tax levels to where they were during the Clinton administration, the dedicate the increased revenue to two, equally divided, purposes.  First, half to reduce the debt.  The other half to start fixing our crumbling infrastructure.  No amendments allowed.  No extraneous pork.  A simple bill, in theory.  An additional easy fix would be to eliminate all corporate welfare.  No more subsidies -- not to big pharma, not to big agra interests or the dairy industry, not to the energy industry.  Then root out all the waste and fraud in the defense budget.  Do these few things and you have essentially solved the debt problem.  Now, let's make things even better.  No more fair trade agreements, and level the playing field for everyone.  As one country treats us in trade, we treat them exactly the same way.  Voila.  Trade deficits disappear.

jmac
jmac

Boehner's aides are saying that a "clean" increase won't pass the House because they "need some face-saving measure to placate House conservatives who want to force concessions from the White House."


I'm tired of this small group of conservatives controlling not only the Republican party but the nation as a whole.  If they want to negotiate the debt ceiling they can let us close a few of the loopholes that keep corporations and billionaires from paying any taxes.  There's a place to argue that out and it isn't when we have to pay our bills or lose our credit rating.  I''m tired of having to "save face" for this group that is totally and completely irresponsible on paying our bills. 

roknsteve
roknsteve

News Flash !!!  Republicans want to cut everything but their salaries.  John Boehner says, "We need our pay and fugg the rest of the country."  Oh and he wants to tax your dreams.  

rutnerh
rutnerh

Typical liberal Time coverup leaving out essential details like the $16.69 trillion debt cap temporarily suspended in Oct 2013, but up about $ 1/3 trillion one week later to $17.07 trill, currently undisclosed but may approach $22 trill by next reset date of 2/7.

Fitzwilliams
Fitzwilliams

I wonder when our government will start working at the debt instead of trying to raise the limit...

notsacredh
notsacredh

As long as the Tea Party still exists, how can anybody be against drone strikes on US soil?

ShaneM
ShaneM

This comment addresses the "inspiration" behind the actions of the t-party inspired debt-ceiling limit "battle" the GOP implemented in October.


What you have below is Joel's Army - much further progressed in 2014 than this warning article in 2008; the goal is to bring down democratic institutions; disguised as their Evil "Holy Spirit." Christians read Acts 5:1-11, there's your Holy Spirit an excuse for murder, and you believed the same man who saved a woman from being stoned then murdered two people over money. Then you have Rick Perry advocating Joel's Army. Then you have the GOP singing the funeral song "Amazing Grace" during debt ceiling battle. Finally you have HR368 implemented at this time, which is 100% totalitarian. The information on what these are about goes back through the "Nazi" misdirection used by the same. But hopefully soon the world will know what this has all been about, researched/investigated, and in the gasping mouths of many as you read this.


http://www.splcenter.org/get-informed/intelligence-report/browse-all-issues/2008/fall/arming-for-Armageddon

http://www.examiner.com/article/rick-perry-bases-call-for-national-salvation-on-joel-s-army-cult-movement


http://www.christianpost.com/news/house-republicans-sing-amazing-grace-together-to-open-debt-limit-meeting-106687/


http://www.youtube.com/watch?v=0Jd-iaYLO1A

Hotpuppy
Hotpuppy

I wonder if the rethuglicans will stop trying to get themselves voted out of office.... or if they will gamble with the debt ceiling again.  When you subtract the people they are busy offending, I wonder who is left to vote for them?  Cruz says he represents all of Texas.... and I suppose that is true if you are okay with excluding gays, women, the working poor (30% of Texans who don't have insurance), etc....  Makes me wonder who is left.... whoever it is they must have deep pockets to finance this lunacy.

Paul,nnto
Paul,nnto

As politically tone deaf as the republicans are I can't believe they would screw with the debt ceiling. Again

tom.litton
tom.litton

@MichaelWhiteheadI agree, but i don't think it's that simple. 


Most "extraneous pork" took the form of infrastructure spending (remember the bridge to nowhere?  Still infrastructure spending!).  Who decides what is pork and what is necessary infrastructure?  

I agree the money should go to improving our infrastructure. It just isn't quite that simple as saying "no pork".  The infrastructure bank might be best.  That way they can get experts to decide what is best to pour money into.


As far as the subsidies, I agree they are way too high, especially in the energy industry.  However, removing the subsidies would make it a lot more costly to consumers, and these are things (food and gas) that everyone has to pay for.  It would have the effect of squeezing peoples salaries, which could push a lot of people into poverty (and make the lives of those already in poverty worse).


I do think subsidies should be eliminated, but i think the money should be used to expand the EITC, along with raising the min wage to $10-$12 an hour.  That should not only be cheaper for the government, but also inject a large amount of cash into the economy.

jmac
jmac

@MichaelWhitehead Does Obama believe in the Clinton tax cuts?   Does he believe that they worked?  We could have easily let Bush's tax cuts expire and then targeted them where they were needed.   All it took was doing nothing.   It was that simple.  


So it's not so simple when the head honcho actually skews center right on this issue.  

MrObvious
MrObvious

@jmac 

That worked so well the other 2 times they tried.

It's a pity that the stupid party has so much influence into our political process. I can't wait for the day when their gibbering stupidity sounds like the squeaking of drowning rats under the floorboard. It was their choice to invest so much power in the teabillies and If they want to choke under a pile of bile, let them.

MrObvious
MrObvious

@rutnerh 

You do realize that they just agreed in a budget that keep increase the deficit? Meaning - their hand was on the pen that signed the dotted line. And now GOP is going to turn around and biatch about paying for the bills coming due?

This is the result of spending more money than we take in - the easy fix is to adjust the tax rate but GOP rather commit more deficit to our future than to help put together a remedy.

It's not a liberal thing; it's a hypocritical GOPer thing.

jmac
jmac

@rutnerh Typical conservative not understanding that Republicans are responsible for us not having revenue as they continue to believe that tax cuts INCREASE revenue.   On the debt limit:  "This year will be worse, because the government shutdown delayed the start of tax season and will concentrate refund payments."


That sick display of a shutdown costs us a lot of money.   And it was for show - "to save face" for the conservatives in the House.   

tom.litton
tom.litton

@rutnerhYou think the government is going to spend $5 trillion dollars in a month?  They don't spend that much in an entire year.

bobcn
bobcn

@Fitzwilliams 

That's exactly what Clinton was doing.  It was Bush and the gopers that pushed the country back into deficit spending.  

tom.litton
tom.litton

@FitzwilliamsNeither side cares about the debt.  If they did, one of the several proposals that would have fixed the debt would have been adopted by now.  


The debt ceiling is only a way to get elected (at least in the primaries).  If breached, it would make the debt worse, not better.

outsider
outsider

@Fitzwilliams 


I wonder when your people will start to understand that the debt ceiling is about paying for stuff the gov't has already promised, rather than incurring new debt. 


For that matter, i wonder when those same people will start to acknowledge that while running a deficit, the deficit has been dropping meaning there has actually been less spending YoY. 


Then again, i wonder when people will take their heads out of their a$ses often enough too. 

outsider
outsider

@sacredh 


I wonder if Obama didn't jump on this early precisely because the GOP hasn't organized any kind of strategy yet.. 

aztecian
aztecian

@reallifescare tactics.  the one percenters could pay this off in the swipe of a pen.

jmac
jmac

@reallife Your grandchildren are beyond frustrated that you can't close loopholes to the extremely wealthy in our nation and to corporations - both of whom pay little or no taxes - so that your grandchildren won't have to. 


It's a simple solution, realie - all Warren Buffett wants you to do is make him pay the same percentage  as his secretary.   You know, be fair.  For the kids.  

wfcollins
wfcollins

Should we just keep borrowing until nobody will lend us any more money?

outsider
outsider

@Paul,nnto 


If they do fight, and the Gov't shuts down, the GOP will take a worse hit than they did last time - if only because they did it again within months. 


For the same reason. 


Listen to the rhetoric. Not doing it without concessions. 

Not that they're against it - but in order for them to do their jobs, they want more goodies. 


So much for by the people, for the people. 

ARTRaveler
ARTRaveler

@Paul,nnto Please, please, shut it down at month-end so the Tea Party Social Security checks get delayed along with the Medicare payments to their doctors who will cancel their appointments.  Maybe the Tea Party nuts will remember that there is at least one purpose of government. 

aztecian
aztecian

@Paul,nntoi think the thuglicans and the heritage foundation invented the debt ceiling.  this is so ridiculous...all these scare tactics.

bobcn
bobcn

@MrObvious @rutnerh 

This is an important point that just can't be made enough times.  The gop is refusing to pay for their own budget. 

ARTRaveler
ARTRaveler

@tom.litton @Fitzwilliams The GOP gave us that self-inflicted wound called the national; debt.  Most of it still occurred under Republican presidents, many in times of plenty when the prudent and smart thing to do would be to pay down the debt but then again, these were Republicans, so instead, they cut taxes which further increased the national debt.  Republican stupidity is evident in the House but doing it at the time that Social Security payments go out might convince the only demographic they have left that the government does something right . They may want to re-think the situation.  Remember the definition of insanity!

Fitzwilliams
Fitzwilliams

@outsider@Fitzwilliams I wonder when people will know that the government's promises were made knowing we didn't have the money to pay for them, and the recipients of those promises haven't helped us out to the same degree.


BTW, having my head inside y pelvis sounds painful.

tom.litton
tom.litton

@wfcollinsWe should keep borrowing short term in order to boost revenue by creating jobs.

Think of just the transportation infrastructure (kind of necessary for the economy).  Why not hire the out of work people to rebuild bridges and upgrade ports, rather then wait until the economy recovers when the government will have to take workers away from the private sector?  It will have to be done eventually anyways, and it would be cheaper over all to do it now, even if it means borrowing a bit more money.

ARTRaveler
ARTRaveler

@wfcollins No, we could raise taxes since the whole national debt is a self-inflicted wound.  Only an idiot country would start two (2) wars and give a tax cut at the same time but the leaders at the time did it with the help of the GOTP for no reason at all.  It certainly wasn't to create jobs because in a "level" world, we would ask for 12 years of the tax cuts savings back from the non-performing "job creators".  We do "clawbacks" on companies who get government money to relocate based on job creation and we get some back when the companies fail to meet their commitment.

jason024
jason024

@reallife@aztecian You mean like the 1% who willfully avoid our tax system and try to hide money overseas?  You mean the GOP who rather remove the law punishing tax cheaters instead of actually negotiating over tax reform?