The Treasury will run out of cash by Nov. 5 unless Congress raises the debt ceiling, Treasury Secretary Jacob J. Lew said Thursday in a letter to House Speaker John Boehner (R-Ohio).
Lew said that by that date the Treasury would “exhaust its extraordinary measures” and have $30 billion in cash, less than is often needed for a single day of federal government expenditures.
The new estimate sharpens pressure on Congress – and the outgoing speaker Boehner – to pass legislation to lift the debt ceiling, a once routine procedure that in recent years has drawn opposition of conservative Republicans eager to make a stand over federal spending.
Lew urged Boehner to move quickly to pass legislation raising the debt ceiling, warning that “there is no way to predict the catastrophic damage that default would have on our economy and global financial markets.” He added that “we have learned from previous debt limit
impasses that failing to act until the last minute and engaging in partisan brinksmanship can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.”
The Treasury secretary said that the date was earlier than expected because tax receipts over the past 10 days “were lower than we previously projected.” Treasury also has more information about military and retirement trust funds, Lew’s letter said.
Boehner, who will step down Oct. 30, is expected to push for an increase in the debt ceiling, but if the measure becomes the rallying point for a rebellion by conservative Republicans it could make it more difficult for him to seal deals on budget priorities.
Ways and Means Committee Ranking Member Sander Levin (D-Mich.) said that Lew’s letter and the “lower-than-expected receipts serve as a reminder of the uncertainty inherent in projections and the danger of going to the brink – as my Republican colleagues seem to want to do.”
In 2011, congressional delays in raising the government’s debt ceiling prompted Standard & Poor’s to downgrade Treasury debt for the first time ever. Levin said that Republicans “should not be playing chicken with our country’s full faith and credit.”