WASHINGTON – Treasury Secretary Jacob Lew told Congress on Friday that he will start using the package of emergency measures he has used in the past to keep the federal government from going over the debt limit next week.
The debt limit has been suspended for the past year, meaning that Treasury could borrow as much as it needed to keep the government running. But the limit will go back into effect on March 15 at whatever level of debt exists at that point.
The nation's debt currently stands at $18.1 trillion.
Treasury can employ certain accounting measures to buy time to keep the government operating without facing a costly default on the nation's debt.
In a letter to congressional leaders on Friday, Lew said he would use the first of those measures on March 13, two days before the debt limit will be reimposed. Lew said on March 13 he would stop issuing special-purpose Treasury debt that can be purchased by state and local governments to assist them in financing such activities as construction projects.
The Congressional Budget Office in a report this week estimated that the various measures Lew can employ could put off the date the debt ceiling will have to be raised until October or November. Republicans now control both the House and the Senate. More conservative GOP lawmakers would like to use the need to raise the borrowing limit as leverage to force President Barack Obama to change his policies in such areas as health care and immigration.
However, Senate Republican Leader Mitch McConnell of Kentucky said after the GOP took control of the Senate in November's elections that Republicans would not shut down the government or fail to raise the debt limit.
It was a standoff over the debt limit in August 2011 that prompted the first-ever downgrade of the nation's credit rating by Standard & Poor's and in October 2013 there was a 16-day partial government shutdown.
"Only Congress is empowered to increase the nation's borrowing authority and I hope that Congress will address this matter without controversy or brinksmanship," Lew said in his letter. "I respectfully ask Congress to raise the debt limit as soon as possible."
While GOP lawmakers have given no indication when they will take up legislation to increase the debt ceiling, House Democratic Leader Nancy Pelosi on Friday urged them to move quickly, warning that an unprecedented default by the government on its debt obligations would severely harm the economy by causing consumer and business interest rates to soar.
"There is no reason that the Republican Congress should not act immediately to take the prospect of a catastrophic default off of the table," she said in a statement. "Failure to act would have savage impacts on American families."