Skip to content Skip to footer site map

Navigate Up
Sign In
Home
Treasury For...
AboutExpand About
Resource CenterExpand Resource Center
Empty
ServicesExpand Services
InitiativesExpand Initiatives
CareersExpand Careers
Connect with UsExpand Connect with Us

Treasury Notes

 Treasury Sends Debt Limit Letter to Congress

By: Dan Watson
10/1/2015

Today, Secretary Lew sent the following letter​ to Congress regarding the debt limit:

***   
October 1, 2015

 

 

The Honorable John A. Boehner

Speaker

U.S. House of Representatives

Washington, DC  20515

 

Dear Mr. Speaker:

I am writing to follow up on my previous letters regarding the debt limit and to provide additional information regarding the Department of the Treasury’s ability to continue to finance the government.

In recent letters, I projected that the extraordinary measures we have been employing to preserve borrowing capacity would not be exhausted before late October 2015 and that they likely would last for at least a brief additional period of time.  I cautioned, however, that Treasury’s estimates regarding the debt limit are subject to inherent variability, given the challenges of forecasting the timing and amount of thousands of daily government transactions.

Over the past ten days, we have received quarterly corporate and individual tax receipts and additional information about the activities of certain large trust funds, including military retirement trust funds.  The tax receipts were lower than we previously projected, and the trust fund investments were higher than projected—resulting in a net decrease of resources available to the United States government.

Based on this new information, we now estimate that Treasury is likely to exhaust its extraordinary measures on or about Thursday, November 5.  At that point, we would be left to fund the government with only the cash we have on hand, which we currently forecast to be below $30 billion.  This amount would be far short of net expenditures on certain days, which can be as high as $60 billion.  Moreover, given certain payments that are due in early to mid- November, we anticipate that our remaining cash would be depleted quickly.  Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.

Again, Treasury’s estimates are subject to inherent variability and could change as we receive additional information about daily receipts, investments, and expenditures.  Over the last several weeks, the trend in our projected net resources has been negative, which has reduced the amount of time that we expect to be able to finance the government.  The ultimate date that Treasury exhausts extraordinary measures, however, could be sooner or later than November 5.  We will continue to update Congress as we receive additional information.

Finally, in my previous letter, I noted that Treasury’s cash balance already had fallen below $150 billion.  Maintaining this minimum prudent balance helps protect against potential market interruptions, but it does not increase the debt limit or alter the time we can continue to pay the nation’s bills.  Treasury’s cash balance rose temporarily after the September 15 tax deadline.  Today, we anticipate that it will again fall below the minimum balance, and we expect it will continue to fall until Congress raises the debt limit.

Protecting the full faith and credit of the United States is the responsibility of the United States Congress.  There is no way to predict the catastrophic damage that default would have on our economy and global financial markets.  Moreover, we have learned from previous debt limit impasses that failing to act until the last minute and engaging in partisan brinksmanship 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.  To remove these unnecessary and avoidable threats, I respectfully urge Congress to take action as soon as possible and raise the debt limit well before Treasury exhausts its extraordinary measures.

 

Sincerely, 

 

Jacob J. Lew

 

Identical letter sent to:

            The Honorable Nancy Pelosi, House Democratic Leader

            The Honorable Mitch McConnell, Senate Majority Leader

            The Honorable Harry Reid, Senate Democratic Leader

 

cc:        The Honorable Paul Ryan, Chairman, House Committee on Ways and              Means

            The Honorable Sander M. Levin, Ranking Member, House Committee 

            on Ways and Means

            The Honorable Orrin G. Hatch, Chairman, Senate Committee on                         Finance

            The Honorable Ron Wyden, Ranking Member, Senate Committee on                 Finance

            All other Members of the 114th Congress

 

Posted in:  Debt Limit
Bookmark and Share

Treasury Facts

  • The Treasury is the oldest departmental building in Washington and at the time of its completion, it was one of the largest office buildings in the world.

Featured Video

Featured Photo

On September 23, 2016, the U.S. Department of the Treasury hosted the Freedman’s Bank Forum to discuss strategies to improve jobs, economic opport...

See more photos

Social media privacy