Treasury Urges Congress to Raise Debt Ceiling This Summer

WASHINGTON—Treasury Department officials on Wednesday urged Congress to move quickly to increase the federal borrowing limit this summer, warning that the federal government could run out of cash much sooner than in previous debt-limit episodes.

Congress voted in July 2019 to suspend the limit through July 31. If lawmakers can’t reach another agreement before then, the ceiling would automatically be reinstated and the Treasury wouldn’t be able to raise additional cash from the sale of government securities.

In that case, the Treasury said it would take extraordinary measures to keep paying the government’s bills in full and on time, as it has in the past. Those measures, such as redeeming certain investments in federal pension programs and suspending new investments in those programs to raise cash, have typically lasted several months.

The government continues to face substantial uncertainty over the pace of revenues and spending, making it difficult to predict how long temporary measures might last this year, senior Treasury officials said on a call with reporters.

“Treasury is evaluating a range of potential scenarios, including some in which extraordinary measures could be exhausted much more quickly than in prior debt-limit episodes,” Brian Smith, Treasury’s deputy assistant secretary for federal finance, said Wednesday.