(CNSNews.com) - The portion of the federal debt that is subject to a legal limit set by Congress plummeted by $56,758,000,000 on March 15 hitting its lowest level of 2017, according to the Daily Treasury Statement.
On that same day, the federal debt hit its legal limit, according to the same Daily Treasury Statements.
For the 15 days since then, according to the Treasury’s statements, the debt subject to the limit has been frozen at $19,808,747,000,000—approximately $25 million below the new legal limit.
The debt was able to hit its legal limit—even on a day when it was plunging dramatically--because when the Republican Congress and President Barack Obama on Nov. 2, 2015 enacted the most recent legislation lifting the legal limit on the debt they did not actually set a new limit. Instead, they suspended the debt limit, which allowed the federal government to borrow money and run up new debt without any limit at all throughout the election year of 2016.
The “Bipartisan Budget Act” that the Republican Congress passed and Obama signed--one year before the 2016 election—included language saying that the existing law that imposed a limit on the federal debt “shall not apply for the period beginning on the date of the enactment of this Act and ending on March 15, 2017.”
Congress titled this section of the law the “Temporary Extension of the Public Debt Limit.” It provided that when the “temporary extension” expired on March 15, 2017, the debt limit would be set again at whatever level it hit that day.
Ironically, according to the Daily Treasury Statement for March 15, 2017, the debt subject to the limit dropped by $56,758,000,000 on that day. As a consequence, the debt hit its new limit as the debt was dropping.
Even more ironically, after its precipitous drop on March 15, the debt hit its lowest level for calendar year 2017.
On Jan. 6, the federal debt subject to the legal limit hit its highest point of $19,941,890,000,000. On March 16, following the terms of the Bipartisan Budget Act, the Treasury set the new debt limit at exactly $19,808,772,381,624.74.
That means the new debt limit is more than $133 billion below the level the debt hit on Jan. 6.
Since the Daily Treasury Statement for March 15, the day the suspension of the debt limit expired, the Treasury has reported that the debt subject to the limit has closed every business day at $19,808,747,000,000—or about $25 million below the new legal limit.
The Daily Treasury Statement for March 15 shows the "Total Public Debt Subject to Limit" dropping to $19,808,747,000,000, the lowest level of calendar year 2017.
For 15 straight days (March 15-29), the Daily Treasury Statements have said the same thing: the debt subject to the limit is frozen at $19,808,747,000,000.
At the same time, both the “debt held by the public,” consisting of Treasury bills, notes and bonds, and the “intragovernmental debt,” consisting of money the Treasury has borrowed and spent from government trust funds (such as the Social Security trust fund), continue to fluctuate on a daily basis.
For example, the Daily Treasury Statement for March 29, the latest one published, shows that the federal “debt held by the public” increased by $2,435,000,000—rising from $14,347,300,000,000 at the beginning of the day to $14,349,735,000,000 at the close of business. It also shows that the “intragovernmental” debt decreased by $2,471,000,000—dropping from $5,498,562,000,000 at the beginning of the day to $5,496,091,000,000 at the close of business.
On the same day, the federal “debt subject to the limit” began the day at $19,808,747,000,000 and remained at $19,808,747,000,000 at the close of business.
The Daily Treasury Statement for March 29 shows the "Total Debt Subject to Limit" beginning and ending the day at $19,808,747,000,000--about $25 million below the new statutory limit.
The Treasury has been able to report that the “debt subject to limit” has been frozen for 15 days by declaring a “debt issuance suspension period” and then using what it calls “extraordinary measures” in its handling of the debt.
“Past Treasury Secretaries, when faced with a nearly binding debt ceiling, have used special strategies to handle cash and debt management responsibilities,” the Congressional Research Service said in a report published a month before the Bipartisan Budget Act of 2015 suspended the debt limit until March 15, 2017.
“Actions taken in the past include suspending sales of nonmarketable debt, postponing or downsizing marketable debt auctions, and withholding receipts that would be transferred to certain government trust funds,” said CRS. “Congress has authorized the Treasury Secretary to invoke a ‘debt issuance suspension period’ to use some of these strategies using the Civil Service Retirement Fund and the Thrift Savings Fund, along with the authority to make those funds whole after an easing of the debt constraint.”
On March 16, Treasury Secretary Steven Mnuchin sent a letter to House Speaker Paul Ryan to notify Congress that he was declaring a “debt issuance suspension period.”
“My predecessors have declared ‘debt issuance suspension periods’ under similar circumstances,” told Ryan. In the letter, Mnuchin described how the Treasury would change the way it handled various trust funds in it effort to keep the debt below the limit. These included Civil Service Retirement and Disability Fund, the Postal Service Retiree Health Benefits Fund and the Government Securities Investment Fund.
In 2015, in the “debt issuance suspension period” leading up to the Bipartisan Budget Act that Obama signed on Nov. 2, the Treasury reported that the debt subject to the limit was frozen at $18,112,975,000,000 for 234 days.