US debt limit looms again: Lew warns on 'brinksmanship'

GMT 19:11 2015 Friday ,06 March

Arab Today, arab today US debt limit looms again: Lew warns on 'brinksmanship'

US Treasury Secretary Jacob Lew
Washington - AFP

US Treasury Secretary Jacob Lew urged Congress Friday to avoid another disruptive battle over the country's borrowing ability, which is scheduled to be capped in nine days.
Lew told Congress in a letter that if the cap on borrowing comes into place as scheduled on March 16, the Treasury will have to undertake "extraordinary measures" to keep funding the government, which continues to run a large deficit.
He asked Congress to raise the limit "as soon as possible" to ensure the government continues to be funded.
"Increasing the debt limit does not authorize new spending commitments. It simply allows the government to pay for expenditures Congress has already approved," he said in a letter addressed to John Boehner, the speaker of the House of Representatives.
"Only Congress is empowered to increase the nation's borrowing authority, and I hope that Congress will address this matter without controversy or brinksmanship."
Republicans and Democrats fought a series of battles over the country's borrowings, between 2011 and 2014, that roiled financial markets, caused an unprecedented  downgrade of the country's triple-A debt rating by Standard & Poor's, and forced a partial government shutdown for weeks in 2013.
The Republicans have used the limit to extract spending and tax concessions from Democratic President Barack Obama.
The two sides agreed to a one-year extension in February 2014, allowing the government to borrow as much as needed until March 16 this year, when a limit would be set at that day's level, around $18.1 trillion dollars.
The Republicans now control both houses of Congress, giving them both more leverage on the White House but also more responsibility in keeping the government going.
In the past when the ceiling was hit, the Treasury was able to maintain planned spending without cutbacks through special measures including holding off on the issue of certain local government securities that count against the debt limit, and making certain payments into civil services retirement funds.
Lew said the Treasury would suspend the issuance of the local government securities beginning March 13 to ensure the government has the funding it needs in the short term.


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