The government will reach its borrowing limit around Nov. 5, the Treasury Department said Thursday, setting up what promises be a tense round of negotiations over raising the debt ceiling just as House Republicans transition to a new leadership team with Speaker John Boehner set to step down at the end of the month.
Treasury Secretary Jack Lew wrote Boehner (R-Ohio) on Thursday to inform Congress that the debt limit would need to be increased earlier than under previous estimates. He said the tax payments received in September were lower than expected and that the government expects to have less than $30 billion in cash available by early November.
“Based on this new information, we now estimate that Treasury is likely to exhaust its extraordinary measures on or about Thursday, November 5,” Lew wrote. “Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.”
The deadline puts additional pressure on Boehner to pass a debt limit increase before he leaves office to ensure that the country does not default on its debt. The Ohio Republican has said he would like to wrap up as much business as possible before leaving Congress at the end of October, but he will have to battle conservatives in his own party who are demanding that the next Republican leaders cut spending and reign in the debt.
“There’s a lot of work that needs to be done,” Boehner said at a news conference last week after announcing his resignation. “I plan on getting it as much of it done as I can before I exit.”
The new debt limit deadline falls less than a week after Congress must reauthorize the federal Highway Trust Fund and Democrats are hoping a year-end spending deal can be wrapped up under his watch. It’s unclear how much work Boehner will be able to complete and the answer to that question may come down to how much he is willing to rely on Democratic votes to get key legislation through the House in the coming weeks.