Steven Mnuchin wants to raise the debt ceiling quickly and considers it an important issue, but he wasn’t familiar with what constituted a “clean” hike, which had been central to political fights in recent years.
Mnuchin, President-elect Donald Trump’s pick to lead the Treasury Department, suggested a lack of familiarity with some of the intricacies of the nation’s borrowing cap, while acknowledging the serious need to raise it in a timely fashion.
With the nation’s borrowing cap again set to take effect in March, Mnuchin told the Senate Finance Committee that honoring U.S. debt was “the most important thing of all.”
But when Sen. Michael Bennet (D-Colo.) asked if Mnuchin would commit to a “clean” debt limit increase, Mnuchin professed ignorance.
{mosads}“I don’t know your technical issue of what a clean debt ceiling is,” he said. “I would like to raise the debt ceiling sooner rather than later.”
The demand for a “clean” increase to the debt limit — that is, a borrowing increase without any accompanying policy concessions — had been a consistent demand of Democrats during the last few debt limit fights under President Obama.
Mnuchin, who had no experience in the federal government before his selection to lead Treasury, sought to show he appreciated the importance of ensuring the government can pay its debts, even if he may have seemed uncomfortable speaking about the ins-and-outs of the process.
At one point, Mnuchin noted “there were certain things that I’d have the power to do to postpone this,” an apparent reference to the “extraordinary measures” regularly deployed by the Treasury Department to buy time under the borrowing cap until Congress passes an increase.
The nation’s borrowing limit was suspended as part of a budget agreement back in 2015, but it will again take effect on March 16. At that point, the borrowing limit will be automatically increased to cover all government borrowing during that time, but barring an increase, the federal government will not have the ability to borrow more.
Trump’s thinking about U.S. debt previously garnered headlines, when he once suggested that he might renegotiate with the nation’s creditors at a future date. With Treasury bonds considered the bedrock of the global financial system, the notion of renegotiating the country’s debt obligations raised eyebrows.
Trump later clarified that he recognized the importance of protecting the nation’s credit reputation, and Mnuchin underlined that in his remarks.
“The president-elect has made it perfectly clear … that honoring the U.S. debt is the most important thing,” he said.