Treasury Department Bumps Up Debt Limit Deadline To November 3

Lew warned in a letter early Thursday that the government could begin running out of cash without new borrowing authority as early as November 3 – two days earlier than Treasury’s earlier estimate.

Jacob J. Lew to set an earlier deadline for Congress to raise the debt ceiling.

October 15 Uncle Sam may not have enough cash to make interest payments on his debt a month from now if Congress does not approve an increase on the federal borrowing limit, currently at $18.1 trillion.

Senate Majority Whip John Cornyn, R-Texas, told CQ Roll Call in a recent interview that while he agreed with conservatives that certain policy concessions are desirable in exchange for raising the debt ceiling, the USA can not afford to go over the cliff. Speaker John Boehner (R-Ohio) announced his resignation last month, and the GOP is struggling to find a successor.

“We have learned from the past that failing to act until the last minute 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”, he said.

A Politico report on Wednesday suggested that House Republican leadership could move a standalone debt-ceiling bill if broader budget talks with the White House and Senate Republicans did not lead to any immediate solutions. A default on such obligations has never occurred before and would devastate financial markets, according to ABC News.

The non-partisan CBO, which produces independent analyses of budgetary economic issues to support the Congressional budget process, said the Treasury Department will run out of accounting maneuvers as well as the cash reserve during the first week of November.

“The trend in our projected net resources has continued to be negative, and our projections for the relevant period have declined an additional $4-6 billion”, Lew wrote.

Boehner has said he wants to resolve a few outstanding issues before he leaves office. President Obama has said he would not negotiate over a debt limit increase because it is needed to pay for spending Congress already has authorized.