By Peter Schroeder – 10/15/15 09:01 AM EDT
The Treasury Department has moved its deadline for Congress to raise the nation’s borrowing limit to Nov. 3, giving lawmakers even less time to prevent a possible default on the nation’s debt.
In a letter to lawmakers, Treasury Secretary Jack Lew said he expects Treasury will have exhausted its “extraordinary measures” to operate under the borrowing cap two days earlier than he previously forecast. The previous deadline for raising the $18.1 trillion borrowing cap was Nov. 5.
Congress must deal with the conroversial issue amid a serious leadership crisis for Republicans in the House. Speaker John Boehner (R-Ohio) announced his resignation last month, and the GOP is struggling to find a successor.
Lew’s new deadline ups pressure on Boehner to act to bring up a debt limit bill before he leaves office, which would anger conservatives that want to use the borrowing cap as leverage to extract concessions from the White House.
Many have suspected Boehner could move on the debt ceiling before his planned exit at the end of the month. Boehner himself has said he would like to deal with some lingering issues before he resigns, to help clear the deck for whoever his successor might be.
After Nov. 3, Lew warned that without an increase to the debt limit from Congress, the United States would be operating in a “profoundly irresponsible” way — paying government bills with a shrinking amount of cash on hand. Lew said the government would be left with just $30 billion in cash after Nov. 3 to pay bills, which would disappear quickly.
The Congressional Budget Office said Wednesday that the government would miss a payment sometime in the first half of November without the ability to borrow more money. And outside projections by the Bipartisan Policy Center have pegged the date of a missed payment somewhere between Nov. 10 and Nov. 19.
Lew did not predict in his letter when the U.S. would be in risk of missing a payment, but reiterated the dire consequences that could occur if that happened.
Failing to act until the last minute can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” he wrote. “And there is no way to predict the irreparable damage that default would have on global financial markets and the American people.”
Lew explained that the deadline moved up by two days because the department is now projecting it will have $4-6 billion less than previously estimated in the coming weeks.