Treasury Secretary Timothy Geithner “says Republican leaders have privately assured the Obama administration that Congress will raise the government’s borrowing limit in time to prevent an unprecedented default on the nation’s debt,” the AP reports.
But a top Republican quickly pushed back Sunday and said there was no guarantee the GOP would agree to increase the $14.3 trillion debt ceiling without further controls on federal spending.
Geithner told ABC’s “This Week” and NBC’s “Meet the Press” that Republicans told President Barack Obama in a White House meeting last Wednesday that they will go along with a higher limit.
“I want to make it perfectly clear that Congress will raise the debt ceiling,” Geithner said in the interviews taped Saturday and aired Sunday.
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.
In an annual revision “of the figures, the Treasury Department said Monday that China’s holdings totaled $1.16 trillion at the end of December,” the AP reports.
The government made the change to its monthly report based on more accurate information it obtains in an annual survey. That survey more does a better job of determining the actual owners of Treasury securities.
China was firmly in the top spot as the largest foreign holder of U.S. Treasury debt even before the revisions. But the big increase in Chinese holdings could ease fears that Chinese investors might begin dumping their U.S. holdings. Such a development could send U.S. interest rates rising. That would slow America’s economic recovery and increase Washington’s costs for financing the $14.3 trillion national debt.
Filed under China, Treasury
An amendment offered by Senator Al Franken (D-MN) to the American Jobs and Closing Tax Loopholes Act (H.R. 4213) has been adopted by a vote of 63-33. Under a unanimous consent agreement, the amendment required 60 votes to pass.
According to a press release, this amendment “would create an Office of the Homeowner Advocate, funded from existing sources, whose focus would be on assisting homeowners who believe their mortgage servicer is breaking the rules.”
The office aims to “help resolve problems with the Home Affordable Modification Program (HAMP), a program developed by the U.S Treasury Department to help homeowners struggling to keep their homes.”
Senators Olympia Snowe (R-ME) and Patty Murray (D-WA) were also lead sponsors.
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Treasury Secretary Tim Geithner “will meet separately with Sens. Ben Nelson (D-NE) and Lisa Murkowski (R-AK) this afternoon to talk about financial reform,” Talking Points Memo reports.
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Senators have confirmed the nomination of Lael Brainard to be Under Secretary of the Treasury for International Affairs by a vote of 78 to 19.
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Senators have adopted a procedural (cloture) motion to limit debate on the nomination of Lael Brainard to be Under Secretary of the Treasury for International Affairs by a vote of 84 to 10.
A final vote is possible as early as tomorrow.
Update (4/20): This nomination has been confirmed by a vote of 78 to 19.
(credit image – making the difference)