Senator: Treasury efforts on debt ceiling cost taxpayers $2.5B
A GOP senator said Wednesday that “extraordinary measures” the Treasury Department is taking to avoid breaching the debt ceiling cost taxpayers $2.5 billion.
Sen. James Lankford (R-Okla.) revealed the number during a Senate Appropriations hearing with Treasury Secretary Steven Mnuchin, who did not verify the figure but agreed that the measures added costs.
“The best guess that I have in working with your team in trying to get an accurate number of the cost of extraordinary measures is around $2.5 billion to the taxpayer, in real dollars that we pay in because we’re covering our own interest,” Lankford said.
{mosads}“That’s a significant cost and a loss to the taxpayer,” he added.
Since March, the Treasury Department has been using financial loopholes to service U.S. debt and pay its bills without breaching the debt limit. Those measures will run out around mid-October, according to an estimate by the Congressional Budget Office.
Mnuchin agreed that the measures added costs by increasing market uncertainty and by forcing the Treasury to borrow at higher costs.
“Right now effectively, as opposed to borrowing in the market at lower rates, we’re borrowing and making our trust funds whole at slightly higher rates,” he said.
Mnuchin has urged Congress to address the debt ceiling before their August recess.
The House will adjourn for the recess on Friday, while the Senate is expected to stay for an additional two weeks.
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