Source: https://www.everycrsreport.com/reports/R43389.html
Timestamp: 2019-04-20 22:09:05+00:00

Document:
The Constitution grants Congress the power to borrow money on the credit of the United States—one part of its power of the purse—and thus mandates that Congress exercise control over federal debt. Control of debt policy has at times provided Congress with a means of raising concerns regarding fiscal policies. Debates over federal fiscal policy have been especially animated in the past decade, in part because of the accumulation of federal debt in the wake of the 2007-2008 financial crisis and subsequent recession. Rising debt levels, along with continued differences in views of fiscal policy, led to a series of contentious debt limit episodes in recent years.
The most recent suspension of the debt limit lapsed after March 1, 2019. The limit was then reset at $21.988 trillion, a level that accommodates federal obligations incurred during the suspension period. U.S. Treasury Secretary Steven Mnuchin invoked extraordinary authorities on March 4, 2019. CBO estimates that Treasury could meet federal obligations until just before or just after October 1, 2019. One private estimate suggests Treasury could cover federal payments until mid-August, if not later. Such estimates are subject to considerable uncertainty.
The 2011 debt limit episode was resolved on August 2, 2011, when President Obama signed the Budget Control Act of 2011 (BCA; S. 365; P.L. 112-25). The BCA included provisions aimed at deficit reduction and allowing the debt limit to rise in three stages, the latter two subject to congressional disapproval. Once the BCA was enacted, a presidential certification triggered a $400 billion increase. A second certification led to a $500 billion increase on September 22, 2011, and a third, $1,200 billion increase took place on January 28, 2012.
Federal debt again reached its limit on December 31, 2012. Extraordinary measures were again used to allow payment of government obligations until February 4, 2013, when H.R. 325, which suspended the debt limit until May 19, 2013, was signed into law (P.L. 113-3), which reset extraordinary measures. On October 16, 2013, enactment of a continuing resolution (H.R. 2775; P.L. 113-46) resolved a funding lapse and suspended the debt limit through February 7, 2014. On February 15, 2014, a measure to suspend the debt limit (S. 540; P.L. 113-83) through March 15, 2015, was enacted. On November 2, 2015, the Bipartisan Budget Act of 2015 (BBA2015; H.R. 1314; P.L. 114-74) was enacted, which suspended the debt limit through March 15, 2017, and relaxed some discretionary spending limits.
On March 16, 2017, the debt limit was reset at $19,809 billion, and Treasury Secretary Mnuchin notified Congress that he had invoked authorities to use extraordinary measures. On September 6, 2017, an agreement on the debt limit and a continuing resolution was announced between President Trump and congressional leaders. Two days later a measure (P.L. 115-56) was enacted to implement that agreement, which included a suspension of the debt limit through December 8, 2017. Once that suspension lapsed—with a new debt limit set at $20,456 billion—Treasury Secretary Mnuchin invoked authorities to employ extraordinary measures, which estimates had suggested would last until early March. The debt limit issue was addressed when the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123) was enacted on February 9, 2018. Section 30301 of the BBA 2018 suspended the debt limit through March 1, 2019.
Total federal debt increases when the government sells debt to the public to finance budget deficits, which adds to debt held by the public, or when the federal government issues debt to certain government accounts, such as the Social Security, Medicare, and Transportation trust funds, in exchange for their reported surpluses—which adds to debt held by government accounts; or when new federal loans outpace loan repayments. The sum of debt held by the public and debt held by government accounts is the total federal debt. Surpluses reduce debt held by the public, while deficits raise it.
How Long Would Have Extraordinary Measures Lasted in 2015?
Why Did the Estimated Date of Treasury's Exhaustion of Borrowing Capacity Move Up?
The Constitution grants Congress the power to borrow money on the credit of the United States—one part of its power of the purse—and thus mandates that Congress exercise control over federal debt. Control of debt policy provides Congress with one means of expressing views on appropriate fiscal policies.
The most recent suspension of the debt limit lapsed after March 1, 2019. The limit was then reset at $21.988 trillion, a level that accommodates federal obligations incurred during the suspension period. On March 4, 2019, the first business day after the debt limit suspension had lapsed, U.S. Treasury Secretary Steven Mnuchin invoked extraordinary authorities.8 Those extraordinary measures (described below in more detail), along with cash balances and incoming revenues, can be used to meet federal obligations in coming months.
In anticipation of the lapse of the debt limit suspension, the U.S. Treasury had announced it would stop issuing state and local government securities (SLGs) on March 1, 2019.9 SLGs are used by state and local governments as one way of complying with IRS anti-arbitrage rules.10 Issuance of SLGs is expected to resume once the current debt limit episode is resolved.
In late 2017 and early 2018 the debt limit issue was tied to consideration of funding measures for FY2018. On September 8, 2017, enactment of a continuing resolution (Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56) suspended the debt limit through December 8, 2018. Once that suspension lapsed, extraordinary measures were used to meet federal obligations. The Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123), enacted on February 9, 2018, included a provision (Section 30301) that suspended the debt limit through March 1, 2019. A section near the end of this report summarizes recent debt limit activity in more detail.
The amount of time that extraordinary measures allow the U.S. Treasury to extend its borrowing capacity depends on the pace of deficit spending, the timing of cash receipts and outlays, and other technical factors. Tax deadlines and processing dates for some federal disbursements are scheduled, but amounts of collections and outlays depend on decisions and actions of private entities and other federal agencies, which are more difficult to predict. The effects of recent tax changes (P.L. 115-97) and the possibility that further changes could occur in the 116th Congress could also affect revenue projections. Treasury cash flow projections are therefore subject to uncertainty, which complicates attempts to estimate how long extraordinary measures would enable the federal government to meet its financial obligations.
An impending debt ceiling constraint presents more than one deadline. A first deadline is the exhaustion of borrowing capacity. The U.S. Treasury, however, could continue to meet obligations using available cash balances. As cash balances run down, however, other complications could emerge and Treasury's cash resources could fall below levels deemed prudent by outside advisors well before extraordinary measures were exhausted. Low cash balances could complicate federal debt management and Treasury auctions.22 The Government Accountability Office (GAO) has also noted that debt limit episodes generate severe strains for Treasury staff, especially when its room for maneuver is severely restricted.23 Finally, if the U.S. Treasury were to run out of cash, the Treasury Secretary would face difficult choices in how to comply simultaneously with the debt limit and the mandate to pay federal obligations in a timely fashion.
Table 1 presents debt limit changes over the past two decades. The debt limit was modified six times from 1993 through 1997. Two of those modifications were enacted to prevent the debt limit restriction from delaying payment of Social Security benefits in March 1996 before a broader increase in the debt was passed at the end of that month.
After 1997, debt limit increases were unnecessary due to the appearance of federal surpluses that ran from FY1998 through FY2001. Since FY2002 the federal government has run persistent deficits, which have been ascribed to major tax cuts enacted in 2001 and 2003 and higher spending.30 Those deficits required a series of increases in the debt limit.
Starting with passage of the BCA in August 2011, Congress has employed measures that have led to debt limit increases that occur some time after a law is enacted. Dates in the first column of Table 1 in general refer to dates of enactment, which do not match dates when debt limit increases have occurred. For instance, the debt limit was suspended when P.L. 113-83 was enacted on February 12, 2014, and was reestablished on March 16, 2015, when that suspension lapsed. One result of suspending the debt limit, as has been the practice in recent years, is that no fixed number appears in legislation and that a new debt limit level is set only when the suspension lapses.
Sources: CRS, compiled using the Legislative Information System, available at http://www.congress.gov; OMB; and Daily Treasury Statements.
a. Increased the debt limit temporarily through September 30, 1993.
b. Temporarily exempted from limit obligations in an amount equal to the monthly insurance benefits payable under Title II of the Social Security Act in March 1996, the exemption to expire on the earlier of an increase in the limit or March 15, 1996.
c. Temporarily exempted from limit (a) obligations in an amount equal to the monthly insurance benefits payable under Title II of the Social Security Act in March 1996 and (b) certain obligations issued to trust funds and other Federal Government accounts, both exemptions to expire on the earlier of an increase in the limit or March 30, 1996.
d. Difference from debt limit set on August 10, 1993.
e. See discussion in section "Debt Limit Increases Under the BCA." BCA-related increases, divided into three steps ($400 billion on August 2, 2011; $500 billion on September 22, 2011; and $1,200 billion on January 28, 2012) totaled $2,100 billion.
f. Debt limit suspended until May 19, 2013. Debt limit set at $16,699 billion after suspension ended.
g. Debt limit suspended through February 7, 2014. Suspension required presidential certification. Debt limit set to $17,212 billion after suspension ended. See discussion in text below.
h. Debt limit suspended through March 15, 2015. Suspension required no presidential certification.
i. Debt limit set at $18,113 billion on March 16, 2015, following end of suspension.
j. Debt limit set at $19,809 billion on March 16, 2017, following end of suspension.
k. Debt limit suspended through December 8, 2017, and reset as of December 11, 2017, following end of suspension.
l. Debt limit suspended through March 1, 2019, and reset on March 2, 2019, at $21.988 trillion, following end of suspension.
Debate during the 2011 debt limit episode reflected a growing concern with the fiscal sustainability of the federal government. While projections issued in 2011 indicated that federal deficits would shrink over the next half decade, deficits later in the decade were expected to rise.33 Without major changes in federal policies, the amount of federal debt would increase substantially. CBO has repeatedly warned that the current trajectory of federal borrowing is unsustainable and could lead to slower economic growth in the long run as debt rises as a percentage of GDP.34 Unless federal policies change, Congress would repeatedly face demands to raise the debt limit to accommodate the growing federal debt in order to provide the government with the means to meet its financial obligations.
The next section provides a brief chronology of events from the 2011 debt limit episode.
On May 16, 2011, U.S. Treasury Secretary Timothy Geithner announced that the federal debt had reached its statutory limit and declared a debt issuance suspension period, which would allow certain extraordinary measures to extend Treasury's borrowing capacity until about August 2, 2011.35 Had the U.S. Treasury exhausted its borrowing authority, it could have used cash balances to meet obligations for some period of time.
A bill (H.R. 1954) to raise the debt limit to $16,700 billion was introduced on May 24 and was defeated in a May 31, 2011, House vote of 97 to 318. The House passed the Cut, Cap, and Balance Act of 2011 (H.R. 2560; 234-190 vote) on July 19, 2011. The measure would have increased the statutory limit on federal debt from $14,294 billion to $16,700 billion once a proposal for a constitutional amendment requiring a balanced federal budget was transmitted to the states. On July 22, the Senate tabled the bill on a 51-46 vote.
On July 25, 2011, the Budget Control Act of 2011 was introduced in different forms by both House Speaker Boehner (House Substitute Amendment to S. 627) and Majority Leader Reid (S.Amdt. 581 to S. 1323). Subsequently, on August 2, 2011, President Obama signed into law a substantially revised compromise measure (Budget Control Act, BCA; P.L. 112-25), following House approval by a vote of 269-161 on August 1, 2011, and Senate approval by a vote of 74-26 on August 2, 2011.41 This measure included numerous provisions aimed at deficit reduction, and would allow a series of increases in the debt limit of up to $2,400 billion ($2.4 trillion) subject to certain conditions.42 These provisions eliminated the need for further increases in the debt limit until early 2013.
A second increase of $500 billion occurred on September 22, 2011, which was also triggered by the President's certification of August 2. The second increase, scheduled for 50 days after that certification, was subject to a joint resolution of disapproval. Because such a resolution could be vetoed, blocking a debt limit increase would be challenging. The Senate rejected a disapproval measure (S.J.Res. 25) on September 8, 2011, on a 45-52 vote. The House passed a disapproval measure (H.J.Res. 77) on a 232-186 vote, although the Senate declined to act on that measure. The resulting increase brought the debt limit to $15,194 billion.
In late December 2011, the debt limit came within $100 billion of its statutory limit, which triggered a provision allowing the President to issue a certification that would lead to a third increase of $1,200 billion.46 By design, that increase matched budget reductions slated to be made through sequestration and related mechanisms over the FY2013-FY2021 period. That increase was also subject to a joint resolution of disapproval. The President reportedly delayed that request to allow Congress to consider a disapproval measure.47 On January 18, 2012, the House passed such a measure (H.J.Res. 98) on a 239-176 vote. The Senate declined to take up a companion measure (S.J.Res. 34) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-passed measure (H.J.Res. 98), thus clearing the way for the increase, resulting in a debt limit of $16,394 billion.
The third increase could also have been triggered in two other ways.48 A debt limit increase of $1,500 billion would have been permitted if the states had received a balanced budget amendment for ratification. A measure (H.J.Res. 2) to accomplish that, however, failed to reach the constitutionally mandated two-thirds threshold in the House in a 261–165 vote held on November 18, 2011.49 The debt limit could also have been increased by between $1,200 billion and $1,500 billion had recommendations from the Joint Select Committee on Deficit Reduction, popularly known as the Super Committee, been reported to and passed by each chamber. If those recommendations had been estimated to achieve an amount between $1,200 billion and $1,500 billion, the debt limit increase would be matched to that figure. The Joint Select Committee, however, was unable to agree on a set of recommendations.
House Republicans decided on January 18, 2013, to propose a three-month suspension of the debt limit tied to a provision that would delay Members' salaries in the event that their chamber of Congress had not agreed to a budget resolution.56 H.R. 325, according to its sponsor, would allow Treasury to pay bills coming due before May 18, 2013. A new debt limit would then be set on May 19.57 The measure would also cause salaries of Members of Congress to be held in escrow "(i)f by April 15, 2013, a House of Congress had not agreed to" a budget resolution.58 Such a provision, however, could raise constitutional issues under the Twenty-Seventh Amendment.
On January 23, 2013, the House passed H.R. 325, which suspended the debt limit until May 19, 2013, on a 285-144 vote. The Senate passed the measure on January 31 on a 64-34 vote; it was then signed into law (P.L. 113-3) on February 4.
Once the debt limit suspension lapsed after May 18, 2013, the U.S. Treasury reset the debt limit at $16,699 billion, or $305 billion above the previous statutory limit. On May 20, 2013, the first business day after the expiration of the suspension, debt subject to limit was just $25 million below the limit.
Some Members, as noted above, stated that H.R. 325 (P.L. 113-3) was intended to prevent the U.S. Treasury from accumulating cash balances. The U.S. Treasury's operating cash balances at the start of May 20, 2013 ($34 billion), were well below balances ($60 billion) at the close of February 4, 2013, when H.R. 325 was enacted.63 Some experienced analysts had stated that the exact method by which the debt limit would be computed according to the provisions of P.L. 113-3 was not fully clear.64 The U.S. Treasury has not provided details of how it computed the debt limit after the suspension lapsed.
Treasury Secretary Jacob Lew notified Congress on May 20, 2013, that he had declared a new debt issuance suspension period (DISP), triggering authorities that allow the Treasury Secretary to use extraordinary measures to meet federal obligations until August 2.65 On August 2, 2013, Secretary Lew notified Congress that the DISP would be extended to October 11, 2013.66 In those notifications, as well in other communications, Secretary Lew urged Congress to raise the debt limit in a "timely fashion."
How long the U.S. Treasury could have continued to pay federal obligations absent an increase in the debt limit depended on economic conditions, which affect tax receipts and spending on some automatic stabilizer programs, and the pace of federal spending. Stronger federal revenue collections and a slower pace of federal outlays in 2013 reduced the FY2013 deficit compared to previous years.67 CBO estimates for July 2013 put the total federal deficit at $606 billion in FY2013, well below the FY2012 deficit of $1,087 billion, implying a slower overall pace of borrowing.68 Special dividends from mortgage giants Fannie Mae and Freddie Mac also extended the U.S. Treasury's ability to meet federal obligations.
In September 2008, Fannie Mae and Freddie Mac entered voluntary conservatorship. As part of their separate conservatorship agreements, Treasury agreed to support Fannie Mae and Freddie Mac in return for senior preferred stock that would pay dividends. Losses for Fannie Mae and Freddie Mac while in conservatorship have totaled $123 billion, although each has been profitable since the start of 2012. For a profitable firm, some past losses can offset future tax liabilities and would be recognized on its balance sheet as a "deferred tax asset" under standard accounting practices. Fannie Mae and Freddie Mac wrote down the value of their tax assets because their return to profitability was viewed as unlikely.
On October 3, 2013, the U.S. Treasury issued a brief outlining potential macroeconomic effects of the prospect that the federal government would be unable to pay its obligations in a timely fashion.84 The brief provided data on how various measures of economic confidence, asset prices, and market volatility responded to the debt limit episode in the summer of 2011.
When Might the Debt Limit Have Been Binding?
In the absence of a debt limit increase, the cash balances on hand when the U.S. Treasury's borrowing capacity ran out would then dwindle. At the close of business on October 11, 2013, the U.S. Treasury's cash balance was $35 billion.85 Those low cash balances, however, could raise two complications even before that point.
First, low cash balances could have complicated federal debt management and Treasury auctions in late October or early November.86 Yields for Treasury bills maturing after the October 17 date mentioned in Secretary Lew's September 25 letter have increased relative to other yields on other Treasury securities. This appeared to signal reluctance among some investors to hold Treasury securities that might be affected by debt limit complications.
In October 2013, yields for Treasury bills maturing in the weeks after October 17—when the U.S. Treasury's borrowing capacity was projected to be exhausted—rose sharply relative to yields on Treasury securities maturing in 2014. Figure 1 shows secondary market yields on Treasury bills set to mature after the projected date when the Treasury's borrowing capacity would be exhausted.91 The horizontal axis shows days before the end of the DISP, and the vertical scale shows basis points (bps). For instance, the yield for the Treasury bill maturing October 24, 2013, rose from close to zero to 46 bps on October 15, 2013. Those yields are about 10 times larger than for similar bills that mature in calendar year 2014.92 A four-week Treasury bill auctioned on October 8, 2013, sold with a yield of 35 bps. By contrast, a four-week bill sold on September 4, 2013, sold with a yield of 2 bps.93 After enactment of a debt limit measure (H.R. 2775; P.L. 113-46) on October 16, 2013, however, those yields returned to their previous levels.
Source: Bloomberg and Nomura Holdings. Excerpted from Jens Nordvig and Ankit Sahni, Seeing Through the Shutdown, Nomura FX Insights, October 1, 2013; update by Ankit Sahni.
Notes: The 13-week Treasury bill (cusip 912796BG3) matures October 24, 2013. The Treasury bill maturing December 5, 2013, has cusip 912796BN8. A Treasury bill with cusip 9127953B5 matured on August 4, 2011.
Congressional consideration of federal debt policy raised several policy issues that were explored in hearings and in broader policy discussions.
On April 30, 2013, the House Ways and Means Committee reported H.R. 807, which would grant the Treasury Secretary the authority to borrow to fund principal and interest payments on debt held by the public and the Social Security trust funds if the debt limit were reached.99 The Treasury Secretary would also have had to submit weekly reports to Congress after that authority were exercised. On May 9, 2013, the House passed and amended version of H.R. 807.100 The House also passed a version of H.J.Res. 59 that incorporated the text of H.R. 807 on September 20. On September 27, the Senate passed an amended version of the measure that did not contain provisions from H.R. 807. The Obama Administration indicated that it would veto H.R. 807 or H.J.Res. 59 containing similar provisions, were either to be approved by Congress.101 The October 2013 debt limit measure (H.R. 2775; P.L. 113-46) contained no payment prioritization provisions.
H.R. 807 would have affected one aspect of the U.S. Treasury's financial management of the Social Security program, but would not alter other aspects. If the debt limit were reached, the U.S. Treasury could still face constraints that could raise challenges in financial management. The U.S. Treasury is responsible for (1) making Social Security beneficiary payments; (2) reinvesting Social Security payroll taxes and retirement contributions in special Treasury securities held by the Social Security trust fund; and (3) paying interest to the Social Security trust funds, in the form of special Treasury securities, at the end of June and December.102 Those special Treasury securities, either funded via Social Security payroll receipts or biannual interest payments, are subject to the debt limit. Thus, sufficient headroom under the debt limit is needed to issue those special Treasury securities. If the debt limit were reached and extraordinary measures were exhausted, the Treasury Secretary's legal requirement to reinvest Social Security receipts by issuing special Treasury securities could at times be difficult to reconcile with his legal requirement not to exceed the statutory debt limit.
On September 25, Treasury Secretary Lew notified Congress that the government would exhaust its borrowing capacity around October 17 according to updated estimates. At that point, the U.S. Treasury would have had a projected cash balance of only $30 billion to meet federal obligations.
The debt limit suspension ended on February 7, and a limit was set to reflect the amount of debt necessary to fund government operations before the end of the suspension. The U.S. Treasury was precluded in P.L. 113-46 from accumulating excess cash reserves that might have allowed an extension of extraordinary measures.
The resolution of the debt limit episode and the ending of the federal shutdown in October 2013 set up a subsequent episode in early 2014.
In late November 2013, CBO issued an analysis of Treasury cash flows and available extraordinary measures.109 Treasury, according to those estimates, might exhaust its ability to meet federal obligations in March. Because Treasury cash flows can be highly uncertain during tax refund season, CBO stated that that date could arrive as soon as February 2014 or as late as early June.
On February 11, 2014, the House voted 221-201 to suspend the debt limit (S. 540) through March 15, 2015. The amended measure included restrictions on Treasury debt management in the version reported by the Rules Committee, but omitted provisions to reverse reductions in cost-of-living adjustments to working-age military retiree pensions and an extension of nondefense mandatory sequestration.120 The Senate voted to concur in the House amendment the following day on a 55-43 vote. The President signed the measure (P.L. 113-83) on February 15, 2014. Unlike previous measures that suspended the debt limit, a presidential certification was not required. A separate measure was also signed into law on the same day (P.L. 113-82) to reverse reductions in cost-of-living adjustments to working-age military retiree pensions for those who entered the military before the beginning of 2014.
In May 2015, the U.S. Treasury changed its cash management policy to adopt recommendations of the Treasury Borrowing Advisory Committee and an internal review.127 The new policy is intended to ensure that the U.S. Treasury could continue to meet federal obligations even if its market access were disrupted for a week or so. Treasury Secretary Lew noted that an event of the scale such as "Hurricane Sandy, September 11, or a potential cyber-attack disruption" might cause a lapse in market access.128 The new cash management policy does not affect the date when the debt limit might constrain the U.S. Treasury's ability to meet federal obligations.
The U.S. Treasury's headroom under the debt limit consists of remaining amounts of funds available for extraordinary measures and available cash reserves. When federal receipts exceed federal outlays, that headroom expands, except for those receipts or outlays that are linked to intragovernmental accounts such as Social Security. The headroom gained by those receipts is exactly offset because Treasury must issue special securities to the appropriate intragovernmental trust fund, and those securities are subject to the debt limit. Conversely, when outlays are funded by such intragovernmental accounts, the increase in Treasury's headroom due to redemption of special securities is offset by Treasury's need to provide funding for that redemption either by drawing down cash balances or additional borrowing.
Independent forecasts of when extraordinary measures would be exhausted were close to the date estimated by the U.S. Treasury. One private forecast estimated Treasury's headroom under the debt limit at $38 billion on November 5, 2015.131 CBO, according to an October 14, 2015, report, projected that "Treasury will begin running a very low cash balance in early November, and the extraordinary measures will be exhausted and the cash balance entirely depleted sometime during the first half of November."132 Figure 2 shows one recent independent estimate of Treasury's headroom that shows Treasury's available resources falling below $50 billion after the first few days of November 2015.
Source: Lou Crandall, Wrightson ICAP, October 12, 2015.
Notes: Intra-monthly borrowing authority partially interpolated for July through September 2015. Levels after October 8, 2015, were projected.
Lower than expected tax receipts during the fall of 2015 and higher than expected federal trust fund investments pushed the date back from what outside forecasters had expected earlier in the year. For example, net issuance of Government Account Series securities—which includes special Treasury securities held by federal trust funds—was about $10 billion higher on the first day of FY2016 as compared to the first day of FY2015.134 On October 9, 2015, the U.S. Treasury issued a summary of debt balances that provided a more detailed view of its headroom under the debt limit.135 According to that summary, Treasury had used $355 billion of its available $369 billion in extraordinary measures as of October 7, 2015, leaving $14 billion to meet forthcoming obligations.
Secretary Lew noted in previous correspondence with Congress that projections of Treasury's ability to meet federal obligations were subject to significant uncertainty due to the variability of federal tax collections and expenditure patterns. While the U.S. Treasury's payment calendar, tax due dates, and securities auction schedule are generally regular and predictable, the amounts paid or received on a given day can fluctuate substantially.
Late on the night of October 26, 2015, text of the Bipartisan Budget Agreement of 2015 was issued. The proposal included a provision to suspend the debt limit until March 15, 2017. The debt limit would then come back into effect on the following day at a level reflecting the payment of federal obligations incurred during the suspension period. As with previous debt limit suspensions, the measure prohibits the U.S. Treasury from creating a cash reserve beyond amounts necessary to meet federal obligations during the suspension period. The Bipartisan Budget Act of 2015 would also increase statutory caps on discretionary spending for FY2016 and FY2017, along with measures aimed at offsetting those increases.
On October 27, 2015, the House Rules Committee provided a summary of its provisions and put forth an amendment aimed at addressing certain scoring issues.136 The following day, the House concurred with a modified version of the Senate amendments to H.R. 1314 on a 266-167 vote. The Senate concurred with that version on October 30, 2015, on a 64-35 vote, sending the measure to the President, who signed it (P.L. 114-74) on November 2, 2015.137 Enactment of the measure thus resolved the 2015 debt limit episode by suspending the debt limit until March 15, 2017.
On September 10, 2015, the House Ways and Means Committee reported H.R. 692, which would grant the Treasury Secretary the authority to borrow to fund principal and interest payments on debt held by the public.138 The measure resembles H.R. 807, which was considered in 2013 and is discussed above. The House passed H.R. 692 on October 21, 2015, by a 235-194 vote.
On September 3, 2017, Secretary Mnuchin argued that a debt limit measure should be tied to legislation responding to Hurricane Harvey, which caused extensive damage in southeast Texas.154 On September 6, 2017, outlines of an agreement on the debt limit and a continuing resolution were announced between President Trump and congressional leaders.155 The following day, the Senate, by an 80-17 vote, passed an amended version of H.R. 601, which included an amendment (S.Amdt. 808) to suspend the debt limit and provide funding for government operations through December 8, 2017, as well as supplemental appropriations for disaster relief. On September 8, 2017, the House agreed on a 316-90 vote to the amended measure, which the President signed the same day (Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-56).
On February 9, 2018, enactment of the Bipartisan Budget Act of 2018 (BBA 2018; P.L. 115-123) resolved the debt limit issue until 2019.160 BBA 2018 employed a legislative vehicle, H.R. 1892, which had passed in both the House and Senate in different forms in 2017. On February 9, 2018, differences in the amended measure were resolved by a vote of 71 to 28 in the Senate and a vote of 240 to 186 in the House. BBA 2018 also increased statutory caps on discretionary spending, extended funding of the government until March 23, 2018 (Section 20101), and funded certain disaster assistance programs, among other provisions.
For details, see CRS Report RL31967, The Debt Limit: History and Recent Increases, by D. Andrew Austin.
Approximately 0.5% of total debt is excluded from debt limit coverage. The Treasury defines "Total Public Debt Subject to Limit" as "the Total Public Debt Outstanding less Unamortized Discount on Treasury Bills and Zero-Coupon Treasury Bonds, old debt issued prior to 1917, and old currency called United States Notes, as well as Debt held by the Federal Financing Bank and Guaranteed Debt." For details, see http://www.treasurydirect.gov. The debt limit is codified as 31 U.S.C. §3101.
Although there are hundreds of trust funds, the overwhelming majority are very small. The 12 largest trust funds hold 98.8% of the federal debt held in government accounts. See CRS Report R41815, Overview of the Federal Debt, by D. Andrew Austin.
The National Railroad Retirement Investment Trust, which funds certain railroad retirement benefits, holds a mix of federal and private assets.
In future years, when some trust funds are projected to pay out more than they take in, funds that the Treasury would use to redeem those intergovernmental debts must be obtained via higher taxes or lower government spending.
Federal debt also increases when the U.S. government's balance sheet expands to fund federal credit programs. Seigniorage and other adjustments also affect the level of federal debt. For a crosswalk between the annual federal deficit and the increase in federal debt, see OMB, FY2014 Analytical Perspectives, Table 5-2, Federal Government Financing and Debt.
For details, see CRS Report R44193, Federal Credit Programs: Comparing Fair Value and the Federal Credit Reform Act (FCRA), by Raj Gnanarajah.
Treasury Secretary Steven Mnuchin, letter to congressional leaders, March 4, 2019, https://home.treasury.gov/system/files/136/CSRDF-PSRHBF-Pelosi.pdf. See Daily Treasury Statement, March 4, 2019, https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=19030400.pdf.
U.S. Treasury, "Treasury to Suspend Sales of State and Local Government Series Securities," February 22, 2019, https://treasurydirect.gov/news/pressroom/pressroom_com022219.htm.
CRS Report R41811, State and Local Government Series (SLGS) Treasury Debt: A Description, by Grant A. Driessen and Jeffrey M. Stupak.
CBO, Federal Debt and the Statutory Limit, February 2019," February 26, 2019, https://www.cbo.gov/system/files?file=2019-02/54987-debt-limit.pdf.
Alec Phillips and Blake Taylor, "Government Shutdown May Send Employees Home for the Holidays," Goldman Sachs US Daily, December 18, 2018.
Wrightson ICAP, The Money Market Observer, March 4, 2019.
Congressional Budget Office, Monthly Budget Review for November 2018, December 10, 2018, https://www.cbo.gov/publication/54861.
CRS Insight IN11033, P.L. 115-97 and the 2019 Federal Income Tax Filing Season for Individuals, by Gary Guenther.
See CRS Report RL31913, Debt Limit Legislation: The House "Gephardt Rule," by Bill Heniff Jr.
See CRS Insight IN10837, "Extraordinary Measures" and the Debt Limit, by Grant A. Driessen and Joseph S. Hughes.
For details, see out-of-print CRS Report 95-1109, Authority to Tap Trust Funds and Establish Payment Priorities if the Debt Limit is Not Increased, by Thomas J. Nicola and Morton Rosenberg. Available to congressional clients upon request from the authors. 5 U.S.C. §8348(b) defines a debt issuance suspension period as "any period for which the Secretary of the Treasury determines for purposes of this subsection that the issuance of obligations of the United States may not be made without exceeding the public debt limit." After a debt issuance suspension period ends, the Treasury Secretary must report to Congress as soon as possible regarding fund balances and any extraordinary actions taken. For details, see 5 U.S.C. §8348(j,k). For a list of extraordinary measures, see U.S. Government Accountability Office, Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs, GAO-12-701, July 2012, Table 1, p. 8, available at http://www.gao.gov/assets/600/592832.pdf.
Wrightson ICAP, The Money Market Observer, May 2, 2011; Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated January 6, 2011, http://www.treasury.gov/connect/blog/Documents/Letter.pdf.
Department of the Treasury, Office of the Inspector General, "Response to Senator Hatch Regarding Debt Limit in 2011," OIG-CA-12-006, August 24, 2013, enclosure 1, p. 2, http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/Debt%20Limit%20Response%20%28Final%20with%20Signature%29.pdf.
Wrightson ICAP, "Summer Break Issue," Money Market Observer, September 2, 2013.
U.S. Government Accountability Office, Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs, GAO-12-701, July 2012, http://www.gao.gov/assets/600/592832.pdf.
For details, see testimony from the Senate Banking Committee hearings of October 10, 2013 noted below.
For background, see Tobias Adrian et al., "Repo and Securities Lending," Federal Reserve of New York Staff Report No. 529, revised version February 2013, http://www.newyorkfed.org/research/staff_reports/sr529.pdf.
RBC Capital Markets, U.S. Economics and Rates Focus, September 25, 2013.
Federal Reserve, "FOMC Minutes for October 29-30, 2013 Meeting," videoconference meeting of October 16, p. 11, http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20131030.pdf.
Wrightson ICAP, "Debt Ceiling Outlook," Money Market Observer, January 27, 2014.
Federal Reserve Bank of New York, Treasury Market Practices Group, Operational Plans for Various Contingencies for Treasury Debt Payments, December 23, 2013, https://www.newyorkfed.org/medialibrary/microsites/tmpg/files/Operations_Contingency_Plans.pdf.
See CBO, "Changes in CBO's Baseline Projections Since January 2001," June 7, 2012, http://www.cbo.gov/sites/default/files/cbofiles/attachments/06-07-ChangesSince2001Baseline.pdf. According to CBO estimates, over the FY2002-FY2011 period legislative changes in federal revenue policies accounted for a change of -$6.1 trillion; legislative changes in spending policies accounted for an estimated increase of $5.6 billion over that period; and concomitant net interest costs resulted in a change of $1.4 trillion; all relative to the FY2001 CBO current-law baseline. Economic and technical factors accounted for about 10% of the divergence between FY2001 baseline projections and actual budget results. The four discretionary subfunctions with the largest real increases in outlays between FY2001 and FY2011 were Defense-Military ($322 billion); Elementary, secondary, and vocational education ($34 billion); Hospital and medical care for veterans ($25 billion); and Ground transportation ($18 billion), all expressed in FY2013 dollars. The four mandatory subfunctions with the largest real increases in outlays over the same period were Medicare ($221 billion); Social Security ($196 billion); Health care services ($140 billion); and Unemployment compensation ($86 billion). See also Alan J. Auerbach and William G. Gale, "The Economic Crisis and the Fiscal Crisis: 2009 and Beyond," Tax Notes special report, October 5, 2009.
Reuters, "S&P to Deeply Cut U.S. Ratings If Debt Payment Missed," June 29, 2011. For a summary of statements by the three major ratings agencies, see CRS Report R41932, Treasury Securities and the U.S. Sovereign Credit Default Swap Market, by D. Andrew Austin and Rena S. Miller.
JPMorgan Chase, "The Domino Effect of a US Treasury Technical Default," U.S. Fixed Income Strategy Group Brief, April 19, 2011; Fitch Ratings, "Thinking the Unthinkable—What if the Debt Ceiling Was Not Increased and the US Defaulted?" June 8, 2011.
Congressional Budget Office, An Analysis of the President's Budgetary Proposals for Fiscal Year 2012, April 15, 2011, http://www.cbo.gov/publication/22087.
Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated May 16, 2011, http://www.treasury.gov/connect/blog/Documents/20110516Letter%20to%20Congress.pdf.
Secretary of the U.S. Treasury Timothy Geithner, letter to Majority Leader Harry Reid, dated April 4, 2011, http://www.treasury.gov/connect/blog/Documents/FINAL%20Letter%2004-04-2011%20Reid%20Debt%20Limit.pdf.
Secretary of the U.S. Treasury Timothy Geithner, letter to Speaker John Boehner, dated May 2, 2011, http://www.treasury.gov/connect/blog/Documents/FINAL%20Debt%20Limit%20Letter%2005-02-2011%20Boehner.pdf. The same text was sent to all Members.
U.S. Treasury, "Treasury: No Change to August 2 Estimate Regarding Exhaustion of U.S. Borrowing Authority," Press release tg-1225, July 1, 2011, http://www.treasury.gov/press-center/press-releases/Pages/tg1225.aspx.
According to the U.S. Treasury's Daily Treasury Statement for April 1, debt subject to limit was $14,198.9 billion, just $95.1 billion below the limit at that time of $14,294 billion, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&fname=11040100.pdf. According to the CBO baseline estimates issued in March 2011 (Congressional Budget Office, An Analysis of the President's Budgetary Proposals for FY2012, April 15, 2011, http://www.cbo.gov/publication/22087), the estimated deficit for FY2011 was $1,399 billion and estimated discretionary outlays were $1,361 billion. According to the April 2011 CBO Monthly Budget Review (http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/121xx/doc12126/mbr_april_2011.pdf), the deficit for the first half of FY2011 was $830 billion.
Adam Liptak, "The 14th Amendment, the Debt Ceiling and a Way Out," New York Times, January 24, 2011; Remarks by the President at University of Maryland Town Hall, http://www.whitehouse.gov/the-press-office/2011/07/22/remarks-president-university-maryland-town-hall. Also see CRS Report R45011, Clearing the Air on the Debt Limit, by D. Andrew Austin and Kenneth R. Thomas.
Consideration of this measure began on July 25, 2011, following legislation introduced by House Speaker Boehner (House Substitute Amendment to S. 627) and Majority Leader Reid (S.Amdt. 581 to S. 1323). Speaker Boehner's proposal passed the House on July 29, 2011, by a vote of 218-210. Neither proposal passed in the Senate.
For details, see CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr., Elizabeth Rybicki, and Shannon M. Mahan.
Sequestration is a mechanism that directs the President to cancel budget authority or other forms of budgetary resources in order to reach specified budget reduction targets. Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177), often known as Gramm-Rudman-Hollings (GRH), introduced sequestration procedures into the federal budget process. Those sequestration procedures were modified in subsequent years to address separation of powers issues and other concerns. For details, see CRS Report R41901, Statutory Budget Controls in Effect Between 1985 and 2002, by Megan S. Lynch. Also see The Budget Control Act and Alternate Defense and Non-Defense Spending Paths, FY2012-FY2021, congressional distribution memorandum, November 16, 2012, available to congressional clients from authors upon request.
See CRS Report R41907, A Balanced Budget Constitutional Amendment: Background and Congressional Options, by James V. Saturno and Megan S. Lynch (available to congressional clients upon request).
White House, Message from the President to the U.S. Congress, August 2, 2011, http://m.whitehouse.gov/the-press-office/2011/08/02/message-president-us-congress.
Congress could have considered a joint resolution of disapproval for this increase.
Treasury Secretary Timothy Geithner, letter to Senate Majority Leader Harry Reid, December 26, 2012. Identical letters were sent to other congressional leaders. Presently and in similar past circumstances, the U.S. Treasury has held debt subject to limit $25 million below the statutory limit. Large biannual interest payments to certain trust funds are due on December 31.
The debt issuance suspension period was officially declared on December 31, 2012. See Treasury Secretary Timothy Geithner, letter to Senate Majority Leader Harry Reid, December 31, 2012, http://www.treasury.gov/initiatives/Documents/Sec%20Geithner%20Letter%20to%20Congress%2012-31-2012.pdf.
See Appendix to the December 26, 2012, letter to Majority Leader Reid, https://www.treasury.gov/connect/blog/Documents/Sec%20Geithner%20LETTER%2012-26-2012%20Debt%20Limit.pdf.
Treasury Secretary Timothy Geithner, letter to House Speaker John A. Boehner, January 14, 2013, http://www.treasury.gov/connect/blog/Documents/1-14-13%20Debt%20Limit%20FINAL%20LETTER%20Boehner.pdf.
CBO, Federal Debt and the Statutory Limit, November 2012, http://www.cbo.gov/sites/default/files/cbofiles/attachments/43736-FederalDebtLimit-11-12-12.pdf.
Speaker John Boehner, "Address on the Economy, Debt Limit, and American Jobs," May 16, 2012, prepared text, http://www.speaker.gov/speech/full-text-speaker-boehners-address-economy-debt-limit-and-american-jobs.
Jonathan Weisman, "In Reversal, House G.O.P. Agrees to Lift Debt Limit," New York Times, January 19, 2013, p. A1; Speaker John Boehner, "Speaker Boehner: No Budget, No Pay," speech excerpt, January 18, 2013, http://www.speaker.gov/speech/speaker-boehner-no-budget-no-pay.
Ways & Means Chair David Camp, House debate, Congressional Record, vol. 159 (January 23, 2013), p. H237.
H.R. 325 (P.L. 113-3) §3.
In the Daily Treasury Statement for February 4, 2013 (http://fms.treas.gov/dts/index.html), Table III-A shows a net change in Government Account Series of nearly $42 billion. About $31 billion of that amount reflects replenishment of funds used for extraordinary measures, with the rest reflecting trust fund operations and other activities. Treasury Assistant Secretary for Financial Markets Matthew Rutherford, in a February 6, 2013, quarterly refunding press conference mentioned that the U.S. Treasury had replenished those funds (see webcast: http://www.treasury.gov/press-center/Video-Audio-Webcasts/Pages/Webcasts.aspx).
Upon expiration of the debt issuance suspension period, the Secretary of the Treasury shall immediately issue to the Fund obligations under chapter 31 of title 31 that ... bear such interest rates and maturity dates as are necessary to ensure that, after such obligations are issued, the holdings of the Fund will replicate to the maximum extent practicable the obligations that would then be held by the Fund if the suspension of investment ... during such period had not occurred.
The statutory text (5 U.S.C. §8909(c)) governing the Postal Service Retiree Health Benefit Fund (PSRHDF) states that investments "shall be made in the same manner" as those in the CSRDF.
U.S. Treasury, "Jacob J. Lew Confirmed as Secretary of the Treasury," press release tg-1864, http://www.treasury.gov/press-center/press-releases/Pages/tg1864.aspx. Deputy Treasury Secretary Neal Wolin served as Acting Treasury Secretary after Secretary Geithner left the U.S. Treasury in January 2013 until Lew was confirmed.
U.S. Treasury, Daily Treasury Statements for February 4, 2013, and May 20, 2013.
Norman Carleton, "The Debt Limit and H.R. 325: The 'No Budget, No Pay Act of 2013,'" Washington Outside blog, January 24, 2013, http://washingtonoutside.blogspot.com/2013/01/the-debt-limit-and-hr-325-no-budget-no.html.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, May 20, 2013, http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20Letter%202%20Boehner%20May%2020%202013.pdf. Secretary Lew was confirmed on February 27, 2013.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, August 2, 2013, http://www.treasury.gov/initiatives/Documents/Debt%20Limit%2020130802%20Boehner.pdf.
CBO, Monthly Budget Review for July 2013, August 7, 2013, http://www.cbo.gov/publication/44495.
CBO, Updated Budget Projections: Fiscal Years 2013 to 2023, May 14, 2013, http://www.cbo.gov/publication/44172.
Excerpted from Alex Phillips, "The Smaller Deficit Should Extend the Next Debt Limit Deadline Slightly," U.S. Daily issue brief, Goldman Sachs Global Investment Research, May 3, 2013.
Freddie Mac at the end of 2012 stated that it "will continue to evaluate our conclusion regarding the need" to reverse its writedown of tax assets. The potential deferred tax assets for Freddie Mac are much smaller than those of Fannie Mae. See Freddie Mac (Federal Home Loan Mortgage Corporation), 10-K SEC Filing for Year Ending December 31, 2012, filed February 28, 2013.
Fannie Mae, "Fannie Mae Reports Pre-Tax Income of $8.1 Billion for First Quarter 2013," press release, May 9, 2013, http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/q12013_release.pdf.
Recognition of that deferred tax asset also raises policy issues unrelated to the debt limit. For an overview of related issues, see CRS Report R42760, Fannie Mae's and Freddie Mac's Financial Status: Frequently Asked Questions, by N. Eric Weiss, available to congressional clients upon request. Also see Wrightson ICAP, "Fannie Mae's Deferred Tax Assets," Money Market Observer, April 29, 2013.
U.S. Department of the Treasury, Daily Treasury Statement for June 28, 2013, Table II.
Fannie Mae, "Fannie Mae Reports Net Income of $10.1 Billion and Comprehensive Income of $10.3 Billion for Second Quarter 2013," press release, August 8, 2013, http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/q22013_release.pdf.
Reuters, "Freddie Mac profit jumps; will pay U.S. Treasury $4.4 bln (update 3)," August 7, 2013, http://www.reuters.com/article/2013/08/07/usa-freddiemac-results-idUSL1N0G80GK20130807.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, May 17, 2013, http://www.treasury.gov/initiatives/Documents/Debt%20Limit%205-17-13%20Boehner.pdf.
Wrightson ICAP, "Treasury Refunding Preview," Money Market Observer, July 29, 2013; Alex Phillips, "The Smaller Deficit Should Extend the Next Debt Limit Deadline Slightly," U.S. Daily issue brief, Goldman Sachs Global Investment Research, May 3, 2013; Citi Research, "U.S. Political Risk Autumn Budget Battles and the Next Fed Chair Outlook," research brief, August 5, 2013.
Because the debt issuance suspension period included June 30, 2013, the U.S. Treasury gained additional headroom due to the maturation of certain Civil Service Disability and Retirement Fund (CSRDF) securities. For details on CSRDF and debt limit extraordinary measures, see GAO, Debt Limit: Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs, GAO-12-701, July 2012, http://www.gao.gov/products/GAO-12-701.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, August 26, 2013, http://www.treasury.gov/initiatives/Documents/082613%20Debt%20Limit%20Letter%20to%20Congress.pdf.
For example, Goldman Sachs has predicted that the U.S. Treasury would run out of cash around November 1, 2013. See Alex Phillips, "The US Fiscal Debate: Headline Risks to the Downside, Fiscal Risks to the Upside," Goldman Sachs U.S. Daily, September 19, 2013. Also see CBO, "Federal Debt and the Statutory Limit, September 2013," September 25, 2013, http://www.cbo.gov/publication/44608. CBO estimates that without an increase in the debt limit, that the U.S. Treasury would exhaust its cash balances between October 22 and October 31, although that time frame is subject to uncertainty due to variations in federal outlays and receipts.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, September 25, 2013, http://www.treasury.gov/Documents/Debt%20Limit%2020130925%20Boehner.pdf.
U.S. Department of the Treasury, Daily Treasury Statement, Table I, October 8, 2013, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&fname=13100800.pdf.
U.S. Department of the Treasury, The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship," October 3, 2013, http://www.treasury.gov/initiatives/Documents/POTENTIAL%20MACROECONOMIC%20IMPACT%20OF%20DEBT%20CEILING%20BRINKMANSHIP.pdf.
Daily Treasury Statement, October 11, 2013, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&fname=13101100.pdf.
"Repo" is short for repurchase agreement. For background, see Tobias Adrian et al., "Repo and Securities Lending," Federal Reserve of New York Staff Report No. 529, revised version February 2013, http://www.newyorkfed.org/research/staff_reports/sr529.pdf.
J.P. Morgan, "J.P. Morgan Takes Action in Light of Possible U.S. Government Default, October 10, 2013, http://www.jpmgloballiquidity.com/blobcontent/62/379/1323366810685_Statment_US_Web_Govt_Default_10-10-13.pdf; Fidelity Investments, "Fidelity Investments Statement on Money Market Mutual Funds," October 2013, https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/MM-MF-Statement_Oct-2013.pdf; Ken Sweet, "Short-term Funds Show Stress as Default Looms," Associated Press, October 9, 2013, http://money.msn.com/business-news/article.aspx?feed=AP&date=20131009&id=16982865.
Those dates are August 2, 2011, and October 17, 2013.
For current Treasury securities quotes, see the Wall Street Journal quote website: http://online.wsj.com/mdc/public/page/2_3020-treasury.html?mod=topnav_2_3010#treasuryB.
See Treasury auction results announcement, October 8, 2013, http://www.treasurydirect.gov/instit/annceresult/press/preanre/2013/R_20131008_1.pdf; and for September 4, 2013, https://www.treasurydirect.gov/instit/annceresult/press/preanre/2013/R_20130904_1.pdf.
U.S. Congress, House Committee on Ways and Means, The Statutory Debt Limit, 113th Cong., 1st sess., January 22, 2013, https://waysandmeans.house.gov/camp-opening-statement-hearing-on-the-debt-limit/.
U.S. Congress, House Committee on Ways and Means, Subcommittee on Oversight, Examining the Government's Ability to Continue Operations When at the Statutory Debt Limit, 113th Cong., 1st sess., April 10, 2013.
U.S. Congress, Joint Economic Committee, The Economic Costs of Debt-Ceiling Brinksmanship, 113th Cong., 1st sess., September 18, 2013, https://www.jec.senate.gov/public/index.cfm/2013/9/jec-hearing-the-economic-costs-of-debt-ceiling-brinkmanship.
U.S. Congress, Senate Committee on Finance, The Debt Limit, hearings, 113th Cong., 1st sess., October 10, 2013, http://www.finance.senate.gov/hearings/hearing/?id=cb3ca699-5056-a032-52fb-9f23396c3f7c.
U.S. Congress, Senate Committee on Banking, Impact of a Default on Financial Stability and Economic Growth, hearings, 113th Cong., 1st sess., October 10, 2013, materials available at http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=0c33e3f3-65cd-44f1-95b9-8a433ad1554c.
The Old-Age and Survivors Insurance Trust Fund (OASI) and the Disability Insurance Trust Fund (DI) are the two Social Security trust funds.
The amendment, offered by Representative Camp, added a prohibition on funding Member compensation through borrowing enabled by the measure. Treasury reporting requirements were also clarified.
OMB, Statement of Administration Policy, H.R. 807 Full Faith and Credit Act, May 7, 2013, https://obamawhitehouse.archives.gov/sites/default/files/omb/legislative/sap/113/saphr807r_20130507.pdf; OMB, Statement of Administration Policy, H.J.Res. 59 Continuing Appropriations Resolution, 2014, September 19, 2013, https://obamawhitehouse.archives.gov/sites/default/files/omb/legislative/sap/113/saphjr59h_20130919.pdf.
See CRS Report RS20607, Social Security: Trust Fund Investment Practices, by Dawn Nuschler, available to congressional clients on request. Social Security investment policy is governed by Section 201 of the Social Security Act (42 U.S.C. 401, http://www.ssa.gov/OP_Home/ssact/title02/0201.htm).
The original version of H.R. 2775, entitled the "No Subsidies Without Verification Act," passed the House on September 12, 2013, on a 235-191 vote.
The debt limit provisions are included as Section 1002 of P.L. 113-46, entitled the "Default Prevention Act of 2013."
The provision required that the presidential certification be issued within three days of enactment.
A motion to proceed on S.J.Res. 26 was rejected on October 29, 2014, by a 45–54 vote.
A discussion of that measure is below.
House Rules Committee, "House Amendment to Senate Amendment to H.J.Res. 59 Offered by Mr. Rogers of Kentucky," October 15, 2013, http://docs.house.gov/billsthisweek/20131014/BILLS-113hjres59-HAmdt2a.pdf.
CBO, "Federal Debt and the Statutory Limit," November 20, 2013, http://www.cbo.gov/publication/44877.
Alex Phillips, "Q&A on the Debt Limit," Goldman Sachs US Daily, January 23, 2014.
Treasury's headroom increases sharply in mid-June in large part due to corporate income tax receipts. Federal corporate estimated income tax payments are due on the 15th day of the fourth, sixth, ninth, and twelfth months of the corporation's tax year. See the IRS tax calendar at http://www.irs.gov/publications/p509/ar02.html#en_US_2014_publink100034257.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, December 19, 2013, http://www.treasury.gov/initiatives/Documents/12-19-2013%20Debt%20Limit%20Letter%20FINAL%20Boehner.pdf.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, January 22, 2014, http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20to%20Congress%201-22-2014.pdf.
U.S. Treasury, "Remarks of Secretary Jacob J. Lew at the Bipartisan Policy Center," February 3, 2014, http://www.treasury.gov/press-center/press-releases/Pages/jl2276.aspx; Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, February 7, 2014, http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20Letter%20020714.pdf.
U.S. Treasury, Daily Treasury Statement, February 10, 2014, https://fms.treas.gov/fmsweb/viewDTSFiles?dir=a&fname=14021000.pdf.
U.S. Treasury, "Treasury Assistant Secretary for Financial Markets Matthew Rutherford February 2014 Quarterly Refunding Statement," February 5, 2014, http://www.treasury.gov/press-center/press-releases/Pages/jl2281.aspx. See also U.S. Treasury, "Treasury Suspends Sales of State and Local Government Series Securities," February 4, 2014, http://treasurydirect.gov/news/pressroom/pressroom_1401slgsoff.htm. For information on these securities, see CRS Report R41811, State and Local Government Series (SLGS) Treasury Debt: A Description, by Grant A. Driessen and Jeffrey M. Stupak.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, February 10, 2014, http://www.treasury.gov/initiatives/Documents/02102014%20CSRDF%20G%20Fund%20Letter.pdf.
For details on military retirement changes in the Bipartisan Budget Act and Consolidated Appropriations Act, 2014, see CRS Report RL34751, Military Retirement: Background and Recent Developments, by Kristy N. Kamarck.
CBO, S. 540, Temporary Debt Limit Extension Act, February 11, 2014, http://www.cbo.gov/publication/45101. CBO estimated that the measure would increase mandatory spending by at least $5 billion in the decades after FY2024.
On February 11, 2014, the House also passed a separate measure (S. 25, P.L. 113-82) that ensured that reduced annual cost-of-living adjustment to the retired pay of working-age military retirees required by the Bipartisan Budget Act would not apply to those who joined the Armed Forces before January 1, 2014. That measure was passed on a 326-90 vote. The Senate agreed to the House changes on a 95-3 vote on the next day. The President signed the bill into law on February 15, 2014.
P.L. 113-83 directed that the limit be increased "to the extent that (1) the face amount of obligations issued under chapter 31 of such title and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury) outstanding on March 16, 2015, exceeds (2) the face amount of such obligations outstanding on the date of the enactment of this Act. The law included a separate provision prohibiting the U.S. Treasury from increasing its cash balances above normal levels during the debt limit suspension."
See CRS Report R41811, State and Local Government Series (SLGS) Treasury Debt: A Description, by Grant A. Driessen and Jeffrey M. Stupak.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner, March 16, 2015, http://www.treasury.gov/initiatives/Documents/Treasury%20Letter%20to%20Congress%20031615.pdf. That letter invoked extraordinary measures related to the Civil Service Retirement and Disability Fund (CSRDF) and the Postal Service Retiree Health Benefits Fund (PSRDBF). Secretary Lew sent a separate letter to Congress to invoke authorities related to the Thrift Savings Plan (TSP) G Fund, http://www.treasury.gov/press-center/media-advisories/Documents/Treasury%20Letter%20to%20Congress%20031715.pdf.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other congressional leaders, July 30, 2015, http://www.treasury.gov/initiatives/Documents/Treasury%20Letter%20to%20Congress%20073015.pdf.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other congressional leaders, July 29, 2015, http://www.treasury.gov/connect/blog/Pages/Treasury-Sends-Debt-Limit-Letter-to-Congress.aspx.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress, September 10, 2015, http://www.treasury.gov/Documents/Treasury%20Letter%20to%20Congress%20091015.pdf.
U.S. Treasury, "Minutes of the Meeting of the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association," May 6, 2015, http://www.treasury.gov/press-center/press-releases/Pages/jl10043.aspx.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress, October 15, 2015, http://www.treasury.gov/connect/blog/Pages/October-2015-Debt-Limit-Letter.aspx.
Treasury Secretary Jacob Lew, letter to House Speaker John A. Boehner and other Members of Congress, October 1, 2015, http://www.treasury.gov/Documents/Treasury%20Letter%20to%20Congress%20100115.pdf.
Wrightson ICAP, The Money Market Observer, "Debt Ceiling Update," October 12, 2015.
CBO, Federal Debt and the Statutory Limit, October 14, 2015, https://www.cbo.gov/publication/50888.
CBO, Federal Debt and the Statutory Limit," August 2015, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50739-FederalDebt.pdf.
U.S. Treasury, Daily Treasury Statement, October 1, 2014 and October 1, 2015, https://www.fms.treas.gov/dts/index.html. Net issuance of Government Account Series on the first day of FY2015 was $54.7 billion, and $64.6 billion on the first day of FY2016.
U.S. Treasury, "Daily Debt Subject to Limit Activity: October 2015," October 9, 2015, http://www.treasury.gov/connect/blog/Documents/Debt%20Activity%20and%20DSL%20Summary%20combined%20for%20distribution%2010_09_2015.pdf.
The measure, previously titled as the "Trade Act of 2015," had previously been passed in different versions by the House and Senate. The House approved H.R. 1314 by a voice vote on April 14, 2015. The Senate approved the measure on a 62-37 vote on May 22, 2015. The amendment eliminated a "not less than" clause in the section setting war funding (OCO/GWOT) levels for FY2016 and FY21017, and changed rates and amounts for many other provisions. OCO stands for Overseas Contingency Operations and GWOT stands for Global War on Terror.
White House Office of the Press Secretary, "Remarks by the President at Signing of the Budget Act of 2015," November 2, 2015, https://www.whitehouse.gov/the-press-office/2015/11/02/remarks-president-signing-budget-act-2015.
Representative McClintock had introduced H.R. 692 on February 3, 2015. See also H.Rept. 114-265, Default Prevention Act, September 18, 2015, http://www.gpo.gov/fdsys/pkg/CRPT-114hrpt265/pdf/CRPT-114hrpt265.pdf.
Representative Marchant introduced H.R. 3442 on September 8, 2015.
U.S. Treasury, Report on the Operation and Status of the Government Securities Investment Fund March 17, 2015 to November 3, 2015 Pursuant to 5 U.S.C. §8438(h), letter to Speaker Paul Ryan and other congressional leaders, December 1, 2015, https://www.treasury.gov/initiatives/Documents/Report%20to%20Congress%20on%20the%20Operation%20and%20Status%20of%20the%20G%20Fund%2012-08-2015.pdf.
U.S. Treasury, Report on Fund Operations and Status From March16, 2015,to December 31, 2015 Pursuant to 5 U.S.C. § 8348(l)(1), letter to Speaker Paul Ryan and other congressional leaders, January 29, 2016, https://www.treasury.gov/initiatives/Documents/Report%20to%20Congress%20CSRDF%2001292016.pdf.
U.S. Treasury, "Minutes of the Meeting of the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association May 5th," May 6, 2015, https://www.treasury.gov/press-center/press-releases/Pages/jl10043.aspx.
U.S. Treasury, "Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association," November 2, 2016, https://www.treasury.gov/press-center/press-releases/Pages/jl0715.aspx. For a description of MMF reforms, see Securities and Exchange Commission, "SEC Adopts Money Market Fund Reform Rules: Rules Provide Structural and Operational Reform to Address Run Risks in Money Market Funds," press release 2014-143, July 23, 2014, https://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542347679.
U.S. Congressional Budget Office (CBO), Federal Debt and the Statutory Limit, March 2017, March 7, 2017, https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52465-federaldebtlimit.pdf.
Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated March 8, 2017, https://www.treasury.gov/initiatives/Documents/DL_SLGS_20170308_Ryan.pdf.
Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated March 16, 2017, https://www.treasury.gov/initiatives/Documents/DL_Letter_20170316_Ryan.pdf. The Treasury's description of extraordinary measures is available at https://www.treasury.gov/initiatives/Documents/Description_of_Extraordinary_Measures_2017_03_16.pdf.
U.S. Treasury, Daily Treasury Statement, March 16, 2017, https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=a&fname=17031600.pdf.
Testimony of Steven T. Mnuchin, Treasury Secretary, in Congress, House Committee on Ways and Means, The President's Fiscal Year 2018 Budget Proposals, 115th Cong., 1st sess., May 24, 2017. See https://www.washingtonpost.com/video/national/mnuchin-to-congress-i-urge-you-to-raise-the-debt-limit/2017/05/24/19dd29b0-40b5-11e7-b29f-f40ffced2ddb_video.html.
Testimony of Mick Mulvaney, OMB Director, in Congress, House Committee on the Budget, The President's Fiscal Year 2018 Budget Proposals, 115th Cong., 1st sess., May 24, 2017. See Damian Paletta and Max Ehrenfreund, "Trump Administration Warns Tax Receipts are Coming in Slowly, Government Could Run Out of Cash Sooner than Expected," Washington Post, May 24, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/05/24/trump-administration-warns-tax-receipts-are-coming-in-slowly-government-could-run-out-of-cash-sooner-than-expected.
Alex Phillips, "The Debt Limit and Tax Receipts: Mixed Signals," Goldman Sachs U.S. Daily, May 25, 2017.
Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated July 28, 2017, https://www.treasury.gov/initiatives/Documents/DL_Letter_20170316_Ryan.pdf.
Alec Phillips, "The Debt Limit: More Unpredictable than Usual," Goldman Sachs U.S. Daily, August 8, 2017; Wrightson ICAP, "Treasury Refunding Recap: Debt Limit," Money Market Observer, August 7, 2017.
See discussion above in section entitled "Cash Management Changes."
"Harvey Victim Funds May be Delayed Without Debt Limit Increase: Mnuchin," Reuters, September 3, 2017, https://www.reuters.com/article/us-storm-harvey-mnuchin/harvey-victim-funds-may-be-delayed-without-debt-limit-increase-mnuchin-idUSKCN1BE0TP.
Damian Paletta and Ashley Parker, "Trump, Schumer Agree to Pursue Plan to Repeal the Debt Ceiling," Washington Post, September 7, 2017, https://www.washingtonpost.com/news/wonk/wp/2017/09/07/trump-schumer-agree-to-pursue-plan-to-repeal-the-debt-ceiling/.
Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated December 11, 2017, https://www.treasury.gov/initiatives/Documents/12.11_FINAL_CSRDF_Ryan_Letter.pdf. For other communications with Congress, see the U.S. Treasury debt limit page at https://www.treasury.gov/initiatives/Pages/debtlimit.aspx.
Secretary of the U.S. Treasury Steven Mnuchin, letter to House Speaker Paul Ryan, dated January 30, 2018, https://www.treasury.gov/initiatives/Documents/Ryan_DL_Letter.pdf. For a previous statement, see Saleha Mohsin and Steven T. Dennis, "Treasury Asked Congress to Raise Debt Limit by Feb. 28, Sources Say," Bloomberg Politics, January 8, 2018, https://www.bloomberg.com/news/articles/2018-01-08/treasury-asks-congress-to-raise-debt-limit-by-end-of-february.
See Wrightson ICAP, "Debt Limit Update," Money Market Observer, January 15, 2018. Also see CBO, Federal Debt and the Statutory Limit, January 31, 2018, https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53514-debtlimit.pdf.
U.S. Treasury, Report on Fund Operations and Status From December 11, 2017 to June 29, 2018 Pursuant to 5 U.S.C. § 8348(l)(1), July 27, 2018, https://www.treasury.gov/initiatives/Documents/CSRDF-Report-to-Congress-07_27_2018.pdf.
For context, see Thomas Kaplan, "Trump Signs Budget Deal to Raise Spending and Reopen Government," New York Times, February 8, 2018, https://www.nytimes.com/2018/02/08/us/politics/congress-budget-deal-vote.html.

References: §3101
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