In a letter sent today to Majority Leader Harry Reid (D-NV), Treasury Secretary Tim Geithner said that his department “now projects that the debt limit will be reached no later than May 16, 2011.”
This is a projection based on the expected level of tax receipts, the timing of our commitments and obligations over the next several weeks, and our judgment concerning the level of cash balances we need to operate. Although these projections could change, we do not believe they are likely to change in a way that would give Congress more time in which to act. Treasury will provide an update of this projection in early May.
If the debt limit is not increased by May 16, the Treasury Department has authority to take certain extraordinary measures, described in detail in the appendix, to temporarily postpone the date that the United States would otherwise default on its obligations. These actions, which have been employed during previous debt limit impasses, would be exhausted after approximately eight weeks, meaning no headroom to borrow within the limit would be available after about July 8, 2011. At that point the Treasury would have no remaining borrowing authority, and the available cash balances would be inadequate for us to operate with a sufficient margin to meet our commitments securely.
An interesting note from the letter:
Nor is it possible to avoid raising the debt limit by cutting spending or raising taxes. Because of the magnitude of past commitments by Congress, immediate cuts in spending or tax increases cannot make the necessary cash available. And, reductions in future spending commitments cannot supply the short-term cash needed. In order to avoid an increase in the debt limit, Congress would need to eliminate annual deficits immediately.
None of those budget policy choices is feasible or responsible. As a consequence, given that Congress has imposed on itself the requirement for periodic increases, there is no alternative to enactment of an increase in the debt limit.
Senate conservatives “plan to filibuster legislation to increase the nation’s debt ceiling above $14.3 trillion, a move that will make it harder for President Obama to garner the votes he needs,” The Hill reports.
Sen. Mike Lee (R-Utah) has told supporters in Utah that he will filibuster the legislation to authorize Treasury Department officials to add to the nation’s multitrillion-dollar debt.
“That’s my intention, to filibuster it,” said Lee, a member of the Senate Tea Party Caucus.
Lee said he might be persuaded to back off if Obama and Democratic leaders agreed to a major concession, which GOP strategists consider highly unlikely.
“The concession would [have to] be something very significant, very permanent and very binding, like a balanced-budget amendment — and passage of it, not just a vote,” Lee said.
Lee added he would vote against an increase of the debt limit no matter what scenario unfolded.
Sen. Jim DeMint (R-S.C.), another founding member of the Tea Party Caucus, said Tuesday he would support a filibuster of the debt-limit increase.
“I’m not going to give any consent to move ahead with a debt-ceiling increase,” he said. “The only way I’m going to work with them is if we pass a balanced-budget amendment before we have that vote.”
DeMint predicted that Senate GOP leaders would force a vote on a balanced-budget amendment before allowing legislation to increase the debt limit to reach the floor.
The federal government “is projected to hit its debt limit between April 5 and May 31.”
Senator Jerry Moran (R-KS) “late last week sent a letter to President Obama announcing his opposition to raising the country’s $14.3 trillion debt ceiling, becoming the first official ‘no’ vote on an issue that’s likely to become the next flashpoint in the ongoing budget debate on Capitol Hill,” the Washington Post reports.
“Americans are looking for leadership in Washington to confront the problems of today, not push them off on future generations,” Moran, a freshman senator who previously served in the House for seven terms,wrote in the March 22 letter. “To date, you have provided little or no leadership on what I believe to be the most important issue facing our nation – our national debt. With no indication that your willingness to lead will change, I want to inform you I will vote ‘no’ on your request to raise the debt ceiling.”
The Treasury Department “estimates that the country will hit the debt ceiling sometime between mid-April and late May.”
Senate Republicans “are preparing to tell President Obama that they want a Balanced Budget Amendment (BBA) to the Constitution passed in Congress in exchange for raising the statuary debt ceiling above $14.2 trillion,” according to Human Events.
“My hope is that we would force a vote on a Balanced Budget Amendment as a condition to voting on the debt ceiling,” Sen. John Cornyn (R.-Tex.) told HUMAN EVENTS. “By next week, or shortly thereafter, we will have all 47 Republicans unified behind the effort, and then begin to reach out to our Democratic colleagues.”
A BBA would force the federal government to balance the federal spending to incoming revenue each year and cap spending at 18% of the gross domestic product (GDP). For the current Fiscal Year (FY 2011), the nonpartisan Congressional Budget Office (CBO) projects that government spending will be $1.4 trillion more than revenue and account for almost 25% of the GDP.
The last time “that the Senate voted on a Balanced Budget Amendment was in 1997.”
The amendment, sponsored by Republican Sen. Orrin Hatch (Utah) failed by only one vote. Former senator and now Vice President Joe Biden voted in favor of the amendment. Of the 11 Democrats who voted for the Hatch BBA in 1997, four are still in the Senate: Max Baucus (Mont.), Tom Harkin (Iowa), Herb Kohl (Wisc.), and Mary Landrieu (La.).
When it’s time “to count votes on raising the nation’s debt ceiling, the Obama administration may not be able to put Democratic Sen. Joe Manchin in its column,” USA Today reports.
The West Virginia senator, who is up for re-election in 2012, is expected to make another high-profile break today from President Obama when he is to tell a university audience that he won’t vote to allow the government to borrow more money unless the proposal comes with a plan to cut back on spending and reduce debt.
“I will vote to against raising the debt ceiling unless the vote is linked to a real budget plan that begins to fix our fiscal mess,” Manchin will say, according to excerpts reported by Politico and other news organizations.
“We cannot make budgets based on the next eletion; they must be based on the next generation,” the Democrat will say.
Treasury estimates “the U.S. will reach the debt ceiling sometime between April 15 and May 31.”