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

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)


Chupacabra-322 Mon, 06/12/2017 - 19:53 Permalink

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.?

bobdog54 Mon, 06/12/2017 - 19:58 Permalink

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....

. . . _ _ _ . . . Mon, 06/12/2017 - 20:01 Permalink

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 Mon, 06/12/2017 - 20:22 Permalink

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?

In reply to by ejmoosa

Give Me Some Truth cougar_w Mon, 06/12/2017 - 20:27 Permalink

$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? 

In reply to by cougar_w

Give Me Some Truth Mon, 06/12/2017 - 20:08 Permalink

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.

amor terra Mon, 06/12/2017 - 21:00 Permalink

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.