Treasury chief to Congress: Raise debt limit before August

Marcus Newton
May 26, 2017

The conservative House Freedom Caucus said on Wednesday that it opposed a "clean" increase of the debt ceiling, just hours after Treasury Secretary Steve Mnuchin said that he preferred a clean raise.

But Mnuchin's request for a "clean" debt bill has been rejected by, among other GOP factions, the hard-right Freedom Caucus.

Mnuchin made the announcement to the House Ways and Means Committee, alongside calls for greater sanctions to be applied to Iran, North Korea and Syria.

Mulvaney said the Trump administration has no position yet on whether it would prefer the debt ceiling be increased to a set dollar amount or the limit be suspended through a date in the future.

Treasury Secretary Steven Mnuchin is defending the aggressive spending cuts in President Donald Trump's budget.

Previous scares over breaching the debt ceiling have caused the U.S. to lose its Triple-A credit rating from Standards&Poor's, ultimately increasing borrowing costs for the government.

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"When the president's budget was done, we were not ready to have a full-blown tax reform plan that we could put into the budget", he said.

A 16-month suspension of the federal borrowing limit expired in March, and Treasury began employing emergency cash-conservation steps soon thereafter to avoid breaching the debt ceiling. It had been expected that Congress wouldn't have to act on the politically painful measure until sometime this fall, but tax revenues are coming in lower than previously estimated.

"My understanding is that the receipts now are coming in a little bit slower than expected and you may soon hear from Mnuchin regarding a change in the date", Mulvaney said at a separate House hearing.

At an earlier Capitol Hill hearing May 24, Mick Mulvaney, director of the Office of Management and Budget, appeared to suggest spring tax receipts were somewhat weak.

The plan, Trump's first as president, combines $4.1 trillion for the upcoming 2018 fiscal year with a promise to bring the budget back into balance in 10 years, relying on aggressive spending cuts, a surge in economic growth - and a $2 trillion-plus accounting gimmick.

Other reports by MaliBehiribAe

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