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.
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.