FEDERAL TREASURY STOPS BORROWING
Government must subsist on whatever cash it has on hand, plus tax revenue
The Treasury Department WASHINGTON took steps to stop borrowing money Thursday as its legal authority to raise the national debt expired.
Treasury Secretary Steven Mnuchin said he’s taking “extraordinary measures” to keep from borrowing money, ending a 16month congressional reprieve from the perennial debate about the debt ceiling. Among measures: suspending investments in pension funds for federal and postal employees though July.
Mnuchin previously suspended a bond financing program for state and local governments.
“I respectfully urge Congress to protect the full faith and credit of the United States by acting to increase the statutory debt limit as soon as possible,” Mnuchin wrote in a letter to congressional leaders Thursday.
Senate Majority Leader Mitch McConnell, R- Ky., said this week Congress will “obviously” raise the debt limit but wouldn’t say when. In the past, Congress has tied the raising of the debt limit to broader budget reforms.
Tuesday, the national debt went up $ 44.5 billion — the largest single- day increase this year.
With the debt limit now frozen at Wednesday’s level of about $ 19.9 trillion, the government must subsist on whatever cash reserves it has on hand, plus tax revenue that comes in. The Bipartisan Policy Center, a think tank that tracks the debt limit, says the government can probably operate through October unless there are significant changes in taxes or spending before then.
Thursday also happened to be the day President Trump sent a preliminary budget proposal to Congress — and an emergency spending request that would add $ 15 billion to the deficit this year.
But Office of Management and Budget Director Mick Mulvaney said Thursday the president didn’t yet have a long- term plan to reduce the budget deficit.
“It’s a good question. It’s a fair question. I would just suggest to you that it’s not the right time for the question,” he said. “The budget does not deal with the debt. It doesn’t even deal with the deficit.”