"The Sooner We Do It, The Better": Congress Should Raise Debt Ceiling Before August Recess, Mnuchin Says

Tyler Durden's picture

Treasury Secretary Steven Mnuchin reiterated his preference for the debt ceiling to be raised before lawmakers break for August recess during testimony before the House Appropriations Committee on Monday.

Here’s Bloomberg’s summary of what was said during the hearing:

  • Can’t imagine a scenario that the debt ceiling isn’t raised
  • Mnuchin urges Congress to align the timing of raising the debt cap with the budget process
  • Markets don’t want Congress to wait to raise the debt ceiling
  • “The sooner we do it the better, there are events in the world that could make it more difficult to borrow”
  • The debt ceiling should not be a Republican or Democrat issue, it should be an acknowledgment “that we have spent the money, we have to fund the government”

Mnuchin did not give lawmakers a hard deadline for when the debt ceiling needed to be raised but said it could wait until after Congress’s August recess, the Hill reported.

“We’ve run lots of models, there are lots of assumptions. I am comfortable saying we can fund through the beginning of September,” adding he’d “prefer not to give a range at this time”

 

“If we don’t raise beforehand, I will provide updated numbers based” on revenue flows

Mnuchin added that the Treasury has "backup plans" that would allow it to fund the government should Congress fail to raised the borrowing limit, though he declined to elaborate on exactly what those plans might be. Mnuchin also expressed his preference for doing a “clean” hike that would not pair the debt bill with spending cuts or other budgetary reforms, as many Republicans would prefer.

The Treasury bumped up against its statutory borrowing limit of $20 trillion back in March.

With its cash balance collapsing toward zero, the Treasury has been forced to suspended the sale of State and Local Government Series (SLGS) securities, which count against the debt limit. At the time, Mnuchin warned that until the debt limit is either raised or suspended as it has done in the past, the Treasury will use additional extraordinary measures to meet its commitments.

 

Based on an ongoing analysis from economists at Wells Fargo, the Treasury will bump up against the debt limit within the first two weeks of September.

In its report, Wells Fargo noted that its estimate is subject to change depending on tax and spending data released in the coming months.

“While it is true that the deadline is a ways off, the complication stems from the fact that Congress is not in session the entire month of August and does not return until September 5. Thus, we expect that Congress will act before the August recess to alleviate the need to rapidly address the issue upon their return,” the Wells Fargo economists wrote.

And in an updated projection that incorporates May cash flow data from the Treasury Department, the Bipartisan Policy Center, a centrist think-tank, projected that the US must increase its debt ceiling by October or November in order to avoid payment default.

When the Treasury reported its monthly receipts and outlays data earlier today, it showed more of the same deficit-spending: The federal government recorded a 68.4% surge in the US budget deficit compared with a year ago. Specifically, outlays of $329 billion soared 19%, offset by a modest 7% increase in receipts. Overall, the Treasury reported a $88.4 billion deficit in May, more than the $87 consensus estimate, and well above the $52.5 billion a year earlier.

For now, it appears the T-Bill curve has a little stress in it around the end of September... (the curve has inverted, showing stronger demand for the longer-dated bill)

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
serotonindumptruck's picture

MUST...KEEP...KICKING...CAN

El Oregonian's picture

The squid's tentacles are starting to encircle around the new administration. It feels good as they rub up on you, up until they start to squeeze, then it starts to get real.

Perimetr's picture

Hey, why do you keep misspelling his name?

its Munchkin

NidStyles's picture

A Jew Goldmanite..... Can't imagine him having American interests in mind here at all.

Gotta make sure the goyim keep paying up....

macki mack's picture

"The Sooner We Do It, The RICHER My Co-Religionists Get": Jewish Mnuchin Says

http://biblicisminstitute.wordpress.com/2015/07/28/how-the-ashkenazi-jew...

DavidC's picture

Quite! The man's mad.

DavidC

slimycorporatedickhead's picture

LOL.. calling it a "ceiling" implies that there is a top/limit.. raising it to infinity means there is no ceiling. Why dont they just raise it to 400 quadrillion so they dont have to keep doing this every 2 years. How do other countries take this seriously? It makes no sense

NidStyles's picture

It's a political wedge issue and serves as a great distraction when they need to keep the goyim thinking that they are burdened by the same conditions.

Most of these fuckers do not pay taxes, that's for the goyim. The debt is how they gain wealth...

Slomotrainwreck's picture
Debt Ceiling is Debt Fantasy - the faculty or activity of imagining things, especially things that are impossible or improbable.
"his research had moved into the realm of fantasy" synonyms: immagination, make-believe
Hal n back's picture

what happened when congress extended the debt ceiling to September 30, 2017 during  april?  I seem to recall Congress doing that and increasing the ceiling by 1.1 trillion then which woudl have  been a ceiling of 21 trillion.

peopledontwanttruth's picture

Just raise it to 500 trillion and get it over with

chunga's picture

Hey Mnuchin, how about if we do your favorite old pastime and foreclose/evict on the US govt?

Lost in translation's picture

Dr. Peter S. Ruckman once said:

"America: the Jews own it, the Catholics run it, and the blacks enjoy it."

Bobbyrib's picture

Dr. Ruckman needs to rethink that and try again..

Chupacabra-322's picture

Must keep Munch'n on that big Fed Dick.

Snot Boogie's picture

Well, hey, if the markets don't want to wait...

small axe's picture

why not just ask Goldman for a loan, scumbag

Chupacabra-322's picture

How many more Securitized Birth Certificate's / Souls paid out to the IMF does that add out to the "Full Faith & Credit" of the Criminal Fraud entity aka THE UNITED STATES, CORP. INC.?

JamesinNM's picture

Wish everyone understood Lincoln brought about slavery of the entire America for the bankers.

bobdog54's picture

This was the one thing I wanted President Trump to handle with a big fat ass veto and gunfight if those corrupt assholes in Congress keep wasting our money and increasing our debt. Then this sons a bitch is promoting it....

dirty fingernails's picture

Trump isn't what he promised or what we hoped - it happens.

Give Me Some Truth's picture

I do think it's cool that all of his flip flops, policy reversals and promises not delivered are archived so succinctly in hundreds of tweets. This will make for a great exhibit at the future Trump Presidential Library (to be housed in the Trump Towers?).

 

dirty fingernails's picture

Lol, thats awesome. Unfortunately, it'll be all whitewashed just like Obama's, W's, Billy's, etc.

Zorba's idea's picture

Do it..Don't do it. I don't give a rats ass!

yogibear's picture

Get rid of the debt ceiling all together. Make the squid happy so they can capitalize on future generations purchases.

Infinite debt and printing. 

. . . _ _ _ . . .'s picture

Now that you've added those FUCKING SHIT ads at the bottom of your pages about meeting the sexiest Russian women, I understand the ZH non-Russia bashing position better.

Those fucking ads make page loading times much longer and do nothing to keep or attract readers, since only the shit sites have them. Credibility out the window for a few pennies of profit. Why don't you sell some more t-shirts instead.

This is the same short-term strategy killing the world, and the pundits here think it would be a good idea. Are the accountants running ZH now, too?

I'm pretty close to the end of my rope with this hypocritical bullshit.

ZH ain't the same anymore, no sir.

ejmoosa's picture

If you are not smart enough to use Adblock, how can we take you seriously?

chunga's picture

The Brave browser is pretty good too. It has all that blocking stuff built in and doesn't choke on Tyler's arrow buttons.

. . . _ _ _ . . .'s picture

I'm using NoScript, Ghostery, and AdBlockPlus.

But you are missing the point, smart guy.

I mentioned lack of credibility and short-term thinking, both of which you seem to be afflicted with.

Others visiting or following links will be put off instantly.

ps_ I was fixing my typos when ejmoosa cut me off, so sorry about the errorz above.

 

The "ZH-TShirt" option still appears in the "More" drop-down above, but they haven't been available for what, months or years now. WTF?

. . . _ _ _ . . .'s picture

Amazing!

5 combined down-votes in a row followed by 7 combined up-votes in a row.

Not very probable.

Looks like I pissed off some admins who responded quickly.

Looks like the readers are on my side, though.

Don't ignore your market, Tylerz.

NidStyles's picture

They are meta targeted ads dipshit.

Quit searching Russia mail order brides...

cougar_w's picture

Just raise it to $30T and be done with it for a few years.

Give Me Some Truth's picture

$40T MIGHT get Trump throuh his second term, depending of course on how many new wars we conduct on top of our existing wars (and what the interest rates are, which will determine "interest on the debt" payments). 

Of course the number doesn't matter They are going to print what they need. We're told the debt limit is $20 trillion today. Who the heck even knows what the real debt is? 

dirty fingernails's picture

40T isn't enough at this point because the increase isn't linear.

montresor's picture

Fuck em, shut it down.. We could stand to live without most federal government agencies for a while..

Give Me Some Truth's picture

"We could live without most government agencies for" ... ahm, forever.  In fact, we lived without most of them for the majority of this country's history.

HRH Feant2's picture

I agree. I would be jumping up and down to see the federal government shut down! Bring it on!

Give Me Some Truth's picture

This is the same guy who said he saw no need to audit the Fed. You might also remember that our president, Donald Trump appointed this guy. The Fed will NOT be audited. And thus the swamp won't be drained. And thus everything else we get worked up over is just components of this evening's entertainment.

 Oh yeah, of course the debt ceiling will be raised. Everyone knows it. It's not even a big deal anymore. They might as well raise it to $999 trillion. It's all funny money anyway. And - guess what!? - "someone" will buy all the debt. We should quit pretending these are even questions or uncertainties.

SUMMARIZING:

Debt Ceiling. Will be raised.

Stock Market. Will go up.

Bonds/Treasuries. Will be "sold" (and "bought.")

Fiat Money. Will be created (and dispersed) as needed.

Government. Will grow.

Precious Metals. Will be capped/suppressed.

Status Quo. Will not change.

johnnycanuck's picture

And he says it like it's normal.  Quite the trick Mnunchin's people pull on the dupes don't you think?

Donald J. Trump's picture

My thoughts exactly.  Raise it now instead of later!  How about lowering it Munchkin.

What's the point of having a debt limit if you just raise it every time you hit it?

aliki's picture

shudda defaulted on the debt day 1

just like he shudda fired comey day 1

now, he owns both whether he wants to or not

JamesinNM's picture

Halve the debt ceiling every year.

insanelysane's picture

Stop the farce that there is something named a debt ceiling.  Just set it to infinity and be done with it.

HRH Feant2's picture

Time to print that $20 trillion dollar coin and disband the Federal Reserve. Now.

moorewasthebestbond's picture

Mnuchin should be breaking big rocks into little rocks for the rest of his life for his involvement in the mortgage business.

gnjus's picture

How about closing down 50% of useless gov. agencies ?

amor terra's picture

Yeah, because each American family of four owing nearly a quarter of a mil already to fund all the gains to the richest 0.1% isn't far enough in debt.

 

dirty fingernails's picture

I thought he said a few days ago that we could get by just fine without a debt ceiling increase this summer? Somebody's bosses at GS corrected his error