|Treasury Secretary Steven Mnuchin, has temporarily run out of government borrowing power.|
Since President Barack Obama signed the “Bipartisan Budget Act” on Nov. 2, 2015 there had been no legal limit on the amount of money the federal government could borrow until now. That law included a section entitled “Temporary Extension of Public Debt Limit.” It said that the law imposing a limit on the federal debt “shall not apply for the period beginning on the date of the enactment of this Act and ending on March 15, 2017.”
By suspending the debt limit from Nov. 2, 2015 through March 15, 2017, Congress and President Obama gave the Treasury the authority to borrow an unlimited amount of money from Nov. 2, 2015 until after the 2016 election.
Treasury Secretary Steven Mnuchin sent a letter to House Speaker Paul Ryan last week reminding him that the suspension of the debt limit would end this Wednesday.
“As you know,” Mnuchin wrote, “the Bipartisan Budget Act of 2015 suspended the statutory debt limit through Wednesday, March 15, 2017. Beginning on Thursday, March 16, 2017, the outstanding debt of the United States will be at the statutory limit.
When the debt hits the limit and Congress and the president do not immediately enact new legislation to increase it or suspend it, the Treasury typically engages in what it calls “extraordinary measures” to keep the debt at a constant level just below the debt ceiling.
“Today,” Mnuchin wrote, “Treasury is announcing that it will suspend the sale of State and Local Government Series (SLGS) securities. SLGS are special-purpose Treasury securities issued to states and municipalities to assist them in conforming to certain tax rules. These securities count against the debt limit. The suspension of SLGS sales will commence on March 15, 2017, and continue until the debt limit is either raised or suspended. As in the past, it is likely Treasury will utilize additional extraordinary measures.”
Expect the appropriate circus acts to be performed in Congress and then the debt ceiling to be raised. Trump has military weapons to buy.