Debt limit came back into effect Thursday at level near $20 trillion
WASHINGTON (AP) - The national debt limit came back into force Thursday at a level near $20 trillion, prompting the Trump administration to alert Congress about the measures it will take to stay under the limit.
Treasury Secretary Steven Mnuchin said in a letter to lawmakers that that he has started employing bookkeeping measures to avoid breaching the new limit, a process that will provide possibly five months or more for Congress to raise the limit.
The borrowing limit had been suspended since November 2015, allowing the government to borrow as much as needed to meet obligations. However, the 2015 legislation set March 16 as the date that the debt limit would go back into effect at whatever debt level existed on March 15.
The Treasury Department reported that the debt stood at $19.8 trillion at the close of business Wednesday. That figure will become the new borrowing limit, and Mnuchin will be required to take actions to keep below that limit.
Those maneuvers, set out in law, are deemed "extraordinary measures" but in reality they have been employed numerous times by Mnuchin's predecessors to buy time until Congress could pass legislation needed to raise the limit.
In his letter to Congress Thursday, Mnuchin said he had suspended sales of state and local government series securities, special bonds that Treasury sells to state and local governments to provide them with a place to make investments that will eventually be used for such projects as infrastructure spending. He also declared a "debt issuance suspension period" lasting until July 28 that will allow him to halt investments in the Civil Service Retirement and Disability Fund.
Mnuchin said he would also halt investments into other government employee retirement funds. If the debt stalemate drags on, he will also have the power to remove investments already made in the government employee pensions funds, providing further room underneath the current barrowing cap.