Although Congress managed to keep the government open as Fiscal 2016 began last Thursday, lawmakers quickly received a troubling reminder of another approaching fiscal crisis: A letter from Treasury Secretary Jack Lew saying the government could face default in early November.
Because Congress has procrastinated on raising the debt limit, the Treasury has been relying for months on “extraordinary measures” to continue paying the government’s bills. Lew said these measures will be exhausted on or about Nov. 5.
In a Washington Monthly blog post today, Phil LaRue, director of government relations for The Concord Coalition, urges lawmakers to quickly take the necessary step of raising the limit. Then, he says, lawmakers should work towards reforming to the debt limit process.
“Contrary to what the name suggests, the debt limit is not — nor has it ever been — an effective way to manage or reduce the nation’s debts,” he writes. “Instead, it has been a venue for dangerous partisan combat that puts short-term political advantage over the creditworthiness of the nation and the stability of the global economy.”
Lawmakers also still need to negotiate funding plans for the new fiscal year. The stop-gap measure that they approved last week to avoid a shutdown merely keeps funding at roughly current levels until Dec. 11. There are widespread doubts about whether effective action will be taken in time to avoid another crisis.
“It’s going to be a very messy December, not a very merry Christmas,” Concord Coalition Executive Director Robert L. Bixby told McClatchy News Service.
Treasury Secretary’s Oct. 1 Letter on Debt Limit
Congress Avoids Shutdown, But More Budget Troubles Are Ahead (McClatchy)