Treasury takes new tack in fight with House GOP on debt ceiling

The White House and Congress are heading into a showdown over the debt limit with no firm deadline for raising the nation’s borrowing limit.

It’s a stark contrast from 2011, the last time President Obama and congressional Republicans were headed for such a collision.

Back then, Treasury Secretary Timothy Geithner consistently offered Congress hard dates to work with, landing on an Aug. 2 deadline three months in advance.

{mosads}His successor, Jack Lew, isn’t doing the same this time, giving Congress a less specific window with just weeks to go.

It’s unclear what effect this will have on the delicate negotiations surrounding the borrowing cap, or if the White House is changing its strategy for dealing with Congress.

During the last major debt-limit standoff, Geithner offered several specific dates for when the debt ceiling needed to be lifted. He would then modify that date as it neared and new information about the government’s finances became available.

For example, in April 2011, he nailed down May 16 as the date “extraordinary measures” would be employed to ensure the government paid its bills and told Congress a boost would be needed by July 8.

A final Aug. 2 deadline for raising the debt ceiling was finally established in May, three months to the day before it arrived — although even then Geithner noted it was a projection and “subject to change.”
Lew has so far taken a different tact.

In a letter sent to Congress Monday, he told lawmakers that the government would exhaust its extraordinary measures to remain beneath the $16.7 trillion lending cap in mid-October, and declined to offer a more specific date.

Steve Bell, senior director at the Bipartisan Policy Center (BPC), which closely tracks the nation’s debt limit, said Geithner “probably was being more specific than he ought to have been.”

It is always difficult to nail down a specific deadline on the borrowing limit given the huge amounts of payments going in and out of the federal government on a given day, something Lew and Geithner have both underlined.

But Lew and outside observers contend this time is especially difficult because the economy is growing again, and because the sequester of automatic spending cuts imposed last year has made budgeting even more difficult.

“It is not possible for us to estimate with any precision the date on which Treasury would exhaust its cash in this situation,” Lew wrote to Congress this week.

In mid-October, he said the government would be left with about $50 billion in cash reserves to pay the bills. Figuring out how long that money will last is effectively impossible, he argued.

Outside debt limit date trackers like the BPC have failed so far to nail down a specific date for when the government will no longer be able to pay all its bills.

The BPC’s analysis pegs the date of disaster sometime between the middle of October and the middle of November, and Bell said Lew was “prudent” in calling for a debt limit boost before that window.

Bell added that Lew could be steering clear of GOP skepticism over a hard deadline by offering a fuzzier window. Geithner was repeatedly pressed by some Republicans in 2011 about how he reached his deadline and how firm it really was.

“I would suspect he’s being very cautious because he saw what happened with Tim,” he said.

Lew’s tactics haven’t won him any more nods of approval from Republicans in Congress, who seem just as skeptical of his reasoning.

A spokesperson for Sen. Orrin Hatch (R-Utah) said Lew’s latest letter “doesn’t sufficiently explain the near-term outlook for the U.S. government’s finances heading into the fall,” and said more information would be needed.

Outspoken conservative Rep. Tim Huelskamp (R-Kan.) told The Hill he believes Lew pushed the deadline forward “as far as they could get away with.”

He said Republicans think the real limit is later than Lew is letting on.

“We still think … it will be deeper in October or later in November,” he said.

In an interview with The Hill, conservative activist Grover Norquist said congressional Republicans should demand more transparency from the Obama administration on how it determines when the debt limit is reached. Norquist accused the administration of moving the debt-limit goal posts in 2011 and called on the GOP to ask for specific data on the nation’s bank accounts.

Erik Wasson contributed to this report.