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U.S. Treasury expands measures to avoid hitting debt limit

Xinhua, March 14, 2015 Adjust font size:

U.S. Treasury Department on Friday introduced more emergency measures to buy time under debt limit.

In his latest letter sent to the Speaker of the House of Representatives Friday, the Treasury Secretary Jacob Lew said that his department will suspend reinvestments of two government pension funds from March 16, as Congress has not acted to raise the debt limit.

On March 6, Lew sent a similar letter to Congress and urged it to raise the debt limit as soon as possible in order to ensure the government continues to be funded. In the letter, Lew said the Department of Treasury would suspend the issuance of the state and local government securities beginning March 13 to avoid running out of room to borrow.

Together, the measures will allow the Treasury to continue borrowing in order to fund the government on a temporary basis.

The Temporary Debt Limit Extension Act passed by Congress in February 2014 suspended the statutory debt limit through March 15, 2015. The U.S government's outstanding debt will be at the statutory limit on March 16.

The Congressional Budget Office (CBO) projected that the Treasury's extraordinary measures would probably be exhausted and the department would probably run out of cash in October or November.

The debt limit is the maximum amount of debt that the Department of Treasury can issue to the public and to other federal agencies. The amount of outstanding debt subject to limit has now risen to around 18.1 trillion U.S. dollars, said the CBO. Endite