Last week, Treasury Secretary Jack Lew sent another letter to Congressional leadership regarding the steps (also known as “extraordinary measures”) that the Treasury Department would take to continue financing the federal government once the statutory debt limit was reinstated. The measures described in the letter, such as declaring a “debt issuance suspension period” regarding investments of the Civil Service Retirement and Disability Fund, have been employed in past instances of debt limit impasses. Secretary Lew said in an earlier letter that Treasury would suspend until further notice the issuance of State and Local Government Series (SLGS) securities, which are issued to states and municipalities to assist them in conforming to certain tax rules and which count against the debt limit when issued.
The Secretary requests that federal lawmakers “raise the debt limit as soon as possible.” However, since the Congressional Budget Office (CBO) estimates that the Treasury Department will not exhaust its use of extraordinary measures until October or November of this year, it is unlikely that lawmakers will act to raise the debt limit until closer to that time.