On May 17, Treasury Secretary Jack Lew sent a letter to House Speaker John Boehner saying that Treasury was set to begin implementing a “standard set of extraordinary measures” to allow borrowing and spending even after the Nation reached its legal debt limit.
Now, a recent Daily Treasury Statement makes clear just what Lew meant: Treasury would cook the books and make it appear as though the debt is holding steady. In fact, for the past 70 days the Federal debt hasn’t changed from exactly $16,699,396,000,000.00, according to Treasury records, despite continued sales of bills, notes and bonds for more than they can be redeemed.
The amount Treasury has reported for Federal debt is a mere $25 million below the debt ceiling imposed by Congress, which, if reached, should force a government shutdown.
Over the past 70 days, Treasury has made a number of moves that should have changed the Federal debt number. By July 26, according to Treasury statements, the government had redeemed nearly $6,128,368,000,000.00 in bills, notes and bonds during this fiscal year. At the same time, Treasury sold an additional $6,759,148,000,000.00 bills, note and bonds. That would equate to a net debt increase for the fiscal year.
According to an analysis of Treasury records by CNS, the value of U.S. Treasury debt instruments circulating in the public has increased $53.267 billion since May 17, meaning the debt limit has been surpassed with no consequence to government spending.
On Sunday, Lew made the rounds on news talk shows to urge Congress not to repeat the 2011 standoff over increasing the debt ceiling because the “confrontations and false crises” is bad for the American economy.
“Let’s remember, we hit the debt ceiling in May,” Lew said. “We’ve been using extraordinary measures since May to pay our bills. We’ll do that for as long as we can.”
Republicans lawmakers say a debt ceiling increase should be accompanied by major spending cuts that can reduce the Nation’s debt and are expected to use the Sept. 30 debt ceiling deadline to leverage cuts.
But, maybe Lew is right. Does the political theater even matter if the Republicans inevitably rollover and fail to force meaningful spending cuts and the debt limit isn’t a limit at all?