“Treasury Secretary Jack Lew is preparing to deploy “extraordinary measures” to avoid default as the nation’s debt limit again takes effect.
In a letter to Speaker John Boehner (R-Ohio) sent Friday, Lew called on Congress to quickly raise the borrowing cap for the nation’s $18 trillion debt “without controversy and brinksmanship.”
“Increasing the debt limit does not authorize new spending commitments. It simply allows the government to pay for expenditures Congress has already approved, thereby protecting the full faith and credit of the United States,” he wrote.
The nation’s borrowing cap was suspended over a year ago, and under that law it will again take effect on March 16. The limit will then be automatically hiked to cover all government borrowing that occurred over the suspension period.
But that also means that as soon as the debt limit returns, the government will immediately be at that ceiling. As such, the Treasury will yet again need to deploy its set of extraordinary measures to free up space under that cap to continue making payments.
On March 16, Lew said the Treasury will stop issuing a special type of security meant to help state and local governments comply with tax rules. Halting those securities is typically the first in a series of steps the Treasury takes to ensure it can continue to pay bills without extra borrowing room.”
“But that also means that as soon as the debt limit returns, the government will immediately be at that ceiling.”
Nothing to worry about here at all, we’ll just print more money. Now, just move along……