Mnuchin Says U. Can Continue to Pay Its Bills Into February
U. Treasury Secretary Steven Mnuchin said he can extend the debt limit suspension period into February before the government exhausts its borrowing capacity.
The debt ceiling had been suspended in September but snapped back into place on Dec. Beyond that deadline, the Treasury can use special cash-management measures to preserve its borrowing capacity temporarily.
Congress must both raise the debt limit to avoid a default on its financial obligations, and come to an agreement on a spending bill to keep the government running after Feb.
In remarks prepared for his appearance before the Senate Banking Housing and Urban Affairs Committee on Tuesday, Mnuchin said he has determined that the debt issuance suspension period “will be extended into February,” beyond the end-of-January deadline he had previously given. He did not provide a specific date in February.
“I respectfully urge Congress to act as soon as possible to protect the full faith and credit of the United States by increasing the statutory debt limit,” according to text of Mnuchin’s testimony for the Senate banking panel that was obtained by Bloomberg.
Failure to ultimately lift that cap could put the U. at risk of defaulting on its financial obligations, including to investors.
Mnuchin has said that he doesn’t favor giving priority to debt-service payments over other obligations. Only Congress can raise the legal limit for federal borrowing, and debate over the debt ceiling has increasingly been used for political leverage in recent years.
Lawmakers in September avoided a potential U. debt default by attaching a bill to fund the government and suspend the debt ceiling until Dec. 8 with an emergency package for hurricane relief. Beyond that deadline, the Treasury can use special cash-management measures to preserve its borrowing capacity temporarily.
Failure to lift that cap could put the U. at risk of defaulting on its financial obligations, including to investors.
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