On Aug. 2, 2011, President Obama signed a deal he had negotiated with congressional leaders to increase the debt limit of the federal government by $2.4 trillion. But, now, after only 15 months, almost all of that additional borrowing authority has been exhausted.
Although Treasury revealed in its statement on Wednesday that it was likely to hit the debt limit by the end of the year, Treasury Secretary Geithner failed to respond to a letter that Senate Finance Ranking Member Orrin Hatch and Senate Budget Ranking Member Jeff Sessions sent to him on Oct. 15 demanding that he notify them by Nov. 1 what he believes to be the exact date Treasury will hit the debt limit and the date he expects to begin using “extraordinary measures” to avoid it.
“Treasury continues to expect the debt limit to be reached near the end of 2012,” says the tenth paragraph of the “Quarterly Refunding Statement” put out by Assistant Secretary of the Treasury for Financial Markets Matthew Rutherford.
“However, Treasury has the authority to take certain extraordinary measures to give Congress more time to act to ensure we are able to meet the legal obligations of the United States of America,” said the statement. “We continue to expect that these extraordinary measures would provide sufficient ‘headroom’ under the debt limit to allow the government to continue to meet its obligations until early in 2013.”
Prior to the release of this statement, Sen. Hatch and Sen. Sessions sent Treasury Secretary Tim Geithner a letter asking him specific questions about the approaching debt limit and the administration’s plans for dealing with it. Hatch’s and Sessions’s questions included these two: 1) “What is Treasury’s forecast of the date upon which Treasury will find it necessary to use extraordinary measures to manage to keep federal debt at or below the statutory debt limit?” 2) “What is Treasury’s forecast of the date upon which the U.S. government will reach the statutory debt limit given use and exhaustion of these extraordinary measures?”
The senators gave Geithner a “hard deadline” of Nov. 1 for providing an initial response to these questions. Julia Lawless, spokesperson for the Republicans on the Senate Finance Committee, confirmed that as of Nov. 6 the committee had received no response from the Treasury secretary.
As of Oct. 31, according to the Daily Treasury Statement (DTS), the portion of the federal debt subject to the legal limit was $16,222,235,000,000–just $171.765 billion below the $16,394,000,000 debt limit.
In October alone, according to the DTS, the debt subject to the limit increased by $195.214 billion.