Trump administration lacks clarity of deadline for debt limit increase

The Trump administration hasn’t publicly said when the federal government would run out of cash, which could complicate the administration’s efforts to convince U.S. Congress to raise the debt limit sooner rather than later, according to the Wall Street Journal.

“Congress is going to need to know what the deadline is, because until they actually focus on a specific date, it’s going to be hard to come up with a strategy to get the increase done,” the Wall Street Journal quoted Goldman Sachs political economist Alec Phillips as saying on Sunday.

The U.S. Treasury has begun using bookkeeping maneuvers to continue to finance the government’s activities since the federal government’s outstanding debt reached its statutory limit on March 15.

U.S. Treasury Secretary Steven Mnuchin last month urged Congress to raise the debt limit before its August recess to avoid a potential federal government default, but he didn’t say when the government would run out of cash.

Mnuchin told reporters on Friday that “we will be fine” if Congress doesn’t raise the debt limit before August, adding the Treasury Department has backup plans for funding the government.

The comments could be interpreted by Congress as a reason to delay action until lawmakers return from their recess on Sept. 5, according to the Wall Street Journal.

But Mick Mulvaney, director of the White House’s Office of Management and Budget, warned last month that Congress may have to raise the debt limit “a couple weeks” sooner than previously expected, as the government tax receipts fell short of expectations in recent months.

Meanwhile, the fight over a debt limit increase could be more complicated this time, as Mnuchin and his counselors haven’t navigated a debt ceiling fight before, and there’s a lack of Senate-confirmed officials atop the Treasury Department, the report said.

“Our view remains that lawmakers will address the debt ceiling in advance of the deadline, but we caution that the path to a deal is murkier than previous iterations of the debt ceiling wars,” Isaac Boltansky, an analyst with Compass Point Research and Trading, was quoted as saying.

The debt limit is the maximum amount of debt that the Treasury can issue to the public and to the other federal agencies. The amount of outstanding debt subject to limit has now risen to about 19.9 trillion U.S. dollars. Enditem

Source: Xinhua/NewsGhana.com.gh

Read Full Story