100 Days: Treasury Has Kept Debt Frozen at $16,699,396,000,000
(CNSNews.com) - The Treasury Department’s latest official daily accounting of the U.S. government’s receipts, expenditures and borrowings--released this afternoon at 4:00 p.m.--indicates that the legally limited debt of the federal government has now been exactly $16,699,396,000,000 for 100 straight days.
The Daily Treasury Statement released today showed the status of the government’s accounts as of the close of business on Friday, Aug. 23. Because the Treasury does no business over the weekend, the federal government’s debt did not change on Saturday or Sunday.
The statement for Aug. 23 said the federal debt subject to the legal limit set by Congress was $16,699,396,000,000—or $25 million below the current limit of $16,699,421,000,000. Every Daily Treasury Statement since May 17 has also shown the legally limited debt at $16,699,396,000,000, or $25 million below the limit.
During the 100-day period from Friday, May 17 to Sunday, Aug. 25, according to the Treasury, the legally limited debt of the federal government did not change.
On May 17, Treasury Secretary Jack Lew sent House Speaker John Boehner a letter indicating that the Treasury was then hitting the legal limit on the debt and that he would begin using “extraordinary measures” to allow the government to continue borrowing money without exceeding that limit.
“In total, the extraordinary measures currently available free up approximately $260 billion in headroom under the limit, as described below,” said an appendix to Lew’s letter.
Among the “extraordinary measures” Lew said he could take to create this “headroom” under the debt limit were: 1) not investing new money from the Civil Service Retirement and Disability Fund (CSRDF) in U.S. Treasury securities, which he said would create $6.4 billion in “headroom” per month, 2) not reinvesting $58 billion ion Treasury Securities held by the CSRDF that would be maturing and not reinvesting $16 billion in interest owed to the fund, which would create $74 billion in headroom, 3) suspending the routine daily reinvestment of $160 billion in special Treasury securities held by the Federal Employees’ Retirement System Thrift Savings Plan, which would create another $160 billion in headroom, and 4) suspending the routine daily reinvestment of Treasury securities held by the government’s own Exchange Stabilization Fund, which would create another $23 billion in headroom.
In a subsequent letter sent to House Speaker John Boehner on Aug. 2, Secretary Lew said he had originally calculated that the Treasury would stop using the extraordinary measures on Aug. 2. But on that day, he said his new estimate was that the Treasury would keep using extraordinary measures, and thus keep borrowing without running over the legal limit, until Oct. 11.
“I have determined that a ‘debt issuance suspension period,’ previously determined to last until August 2, 2013, will continue through October 11, 2013, the last day that Congress is expected to be in session before the Columbus Day recess,” wrote Lew.
In a new letter that he sent to Speaker Boehner today, Lew estimated that the Treasury can keep borrowing until “the middle of October” until it runs out of headroom.
“Based on our latest estimates, extraordinary measures are projected to be exhausted in the middle of October,” Lew wrote.
Lew told Boehner in this letter: “Moreover, it is not possible for us to estimate with any precision the date on which Treasury would exhaust its cash in this situation. The rate at which cash will be drawn down depends on factors that are inherently variable and irregular, including the unpredictability of tax receipts, changes in expenditure flows under sequestration and the willingness of investors to re-invest in, or ‘roll-over,’ Treasury securities.”
For the last 100 days, there has been no variability at all in the federal government debt subject to the legal limit: It has remained precisely $16,699,396,000,000.
Between now and mid-October when Lew expects to exhaust the extraordinary measures he is now using to keep the debt at that number, Congress and the administration will negotiate the spending bill or bills that are needed to fund the government after this fiscal year ends on Sept. 30.
Thus, under Lew's current estimate, the administration and Congress could negotiate new spending bills first—before the exhaustion of the Treasury’s “extraordinary” measures requires them to negotiate a new legal limit on federal borrowing.