U.S. to boost sanctions on Iran, Syria, North Korea: Treasury's Mnuchin
- Author: Wendy Palmer May 26, 2017,
May 26, 2017, 12:54
U.S. Treasury Secretary Steven Mnuchin on Wednesday urged Congress to approve a "clean" increase in the federal debt limit by the time it starts its summer recess in early August. The agency began employing emergency measures to avoid breaching the federal borrowing limit in March.
Markets were rattled during 2011 and 2013 as Washington went through tense debt-limit standoffs to before finally allowing Treasury to continue borrowing.
The timeline is earlier than previous estimates.
"President Trump's budget focuses Treasury on our core missions of collecting revenue and managing the nation's debt, while modernizing, streamlining and increasing efficiencies to reduce operating expenditures", Mnuchin said.
Also, Mnuchin has in the past said he wanted the debt limit dealt with well before the time the government could be forced to choose between making payments on its debt and other government bills or defaulting.
Congress and the administration can discuss future spending cuts, but it was "absolutely critical" to preserve US creditworthiness by paying debts already incurred, he said.
While the decision flies in the face of the Trump administration's preferences, it will please conservative groups, who had hoped that debt ceiling would be raised separately from a larger fight over government funding in September and used as a vehicle to extract fiscal reforms.
White House budget director Mick Mulvaney told a separate House panel that the reason for the new deadline is that "receipts now are coming a little bit slower than expected".
If that happened, Democrats could see an increase in their leverage if their votes were needed to get a debt limit boost enacted.
If all 30 members of the Freedom Caucus oppose a "clean" increase, the House would need Democratic support in order to raise the debt ceiling.