WASHINGTON (AP) — Treasury Secretary Steven Mnuchin told lawmakers on Wednesday that they should vote to increase the government’s borrowing authority — and avert a disastrous economic default — before their August recess.
The timeline is earlier than previous estimates. It had been expected that Congress wouldn’t have to act on the politically painful measure until sometime this fall, but tax revenues are coming in lower than previously estimated.
Mnuchin also urged the House Ways and Means Committee to pass the debt limit legislation as a bill without controversial additions, such as spending cuts sought by conservatives, that could complicate its approval.
“We can all discuss how we cut spending in the future and how we deal with the budget going forward but it is absolutely critical … that we keep the credit of the United States as the most critical issue,” Mnuchin said.
Democrats, including House Minority Leader Nancy Pelosi of California, have promised to support a debt limit increase provided it’s not weighed down by GOP policy changes. But such a vote is sure to be painful for conservative Republicans who opposed hiking the debt limit, presently set at almost $20 trillion.
White House budget director Mick Mulvaney told a separate House panel that the reason for the new deadline is that “receipts currently are coming a little bit slower than expected.”
Mnuchin said in a letter to lawmakers in March that that he has started employing bookkeeping measures to avoid breaching the debt limit.
Those maneuvers, set out in law, are deemed “extraordinary measures,” but in reality they have been employed numerous times by Mnuchin’s predecessors to buy time until Congress could pass the legislation needed to raise the borrowing limit.
The Congressional Budget Office has estimated that the bookkeeping maneuvers Mnuchin can use will be exhausted by sometime in the fall.
Mnuchin has urged lawmakers to move quickly to remove investor doubt about any potential default. Lawmakers had been expected to wait until September or later to act.