Treasury Secretary Steven Mnuchin is warning that the United States could run out of money in early September unless Congress votes to raise the debt ceiling before leaving for the August recess.
“Based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes. As such, I request that Congress increase the debt ceiling before Congress leaves for summer recess,” Mnuchin wrote in a letter to House Speaker Nancy Pelosi (D-Calif.).
Mnuchin sent identical letters on Friday to Senate Majority Leader Mitch McConnell (R-Ky.), Senate Minority Leader Charles Schumer (D-N.Y.) and House Minority Leader Kevin McCarthy (R-Calif.).{mosads}
The letters mark Mnuchin’s first formal request that Congress vote to raise the debt ceiling before lawmakers leave for the August break. He had indicated after a Wednesday meeting with McConnell and McCarthy
that he would prefer Congress act before leaving for the recess.
“That is something we’re having discussions about, updating the numbers and potentially the need to do something before everybody leaves,” Mnuchin said after the GOP meeting.
The timeline would give Congress a matter of weeks to come up with a strategy for how to raise the debt ceiling. The House is scheduled to leave on July 26 and the Senate on August 2.
The debt limit was exceeded earlier this year, and the Treasury Department is now taking steps known as “extraordinary measures” to prevent the government from going over its borrowing limit.
Lawmakers initially had thought they would have until late September or October to raise the debt ceiling, which would let them fold the vote in with a broader spending deal.
But Mnuchin told Congress in May that the debt ceiling increase could happen in “late summer.” And a study released this week by the Bipartisan Policy Center said there was a “significant risk” that the government could reach its debt limit in early September unless Congress raises the cap.
Leadership in both chambers is still hoping to be able to negotiate a larger deal on the defense and nondefense budget caps before they leave for the August recess, into which they could fold a debt ceiling increase.
Merging the two items would let them condense the number of politically tough votes. But the budget and the debt ceiling are on two different timelines. While Congress is likely to have to increase the debt ceiling in weeks, they have until January to pass a budget and avoid across-the-board cuts known as sequestration.
Mnuchin’s letter to Pelosi comes after the two spoke on the phone multiple times this week as they tried to negotiate a larger budget deal. They’re expected to talk again on Friday.
Pelosi told reporters on Thursday that Congress should act on a budget caps deal to raise the debt limit in the next few weeks.
“I am personally convinced that we should act on the caps and the debt ceiling,” Pelosi told reporters, “prior to recess.”
Read the letter below.
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