US Secretary of the Treasury Jack Lew speaks during a press conference at the US Department of the Treasury July 11, 2013 in Washington, DC. Officials from the United States and China are meeting to discus the two world powers’ relationships during the 5th United States and China Strategic and Economic Dialogue. AFP PHOTO/Brendan SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
UPDATE: 4:14 p.m. ET– In a Monday letter to House Speaker John Boehner (R-Ohio), Treasury Secretary Jack Lew said latest estimates show the U.S. hitting the debt limit by the middle of October.
“Protecting the full faith and credit of the United States is the responsibility of Congress because only Congress can extend the nation’s borrowing authority,” Lewwrites. “Failure to meet that responsibility would cause irreparable harm to the American economy.”
The report provides a more specific timeline than previously cited by Treasury officials. Previously, Treasury Secretary Jack Lew said he anticipated the U.S. would not hit the debt ceiling “until Labor Day.”
“The uncertainty caused by putting this off is not good,” Lew said in May. “The anxiety caused to the U.S. and world economy by putting this off until the last minute is not good.”
The mid-October timeframe is sooner than many on Capitol Hill had anticipated. The government hit the borrowing limit several months ago, but Treasury has used emergency measures—such as suspending certain pension contributions—to buy more time for Congress to act. Some believed that the government’s improving fiscal condition—bolstered by rising tax revenue and money coming in from Fannie Mae and Freddie Mac—could give Treasury even more time, potentially until sometime in December.
Last week, Lew called on Congress to raise the debt ceiling, urging lawmakers to “avoid another unnecessary self-inflicted wound” ahead of the Treasury exceeding the limit.
“We cannot afford for Congress to wait until some unknowable last minute to resolve this matter on the eve of a deadline,” Lew said.
As Reuters reported last week, House Republicans have floated using the debt limit as leverage to defund President Barack Obama’s health care reform law.
“There are plenty of discussions ongoing but no decisions at this point,” one GOP leadership aide said.