Treasury Secretary Jack Lew told House Speaker John Boehner and other congressional leaders Wednesday that Congress must vote to increase the government’s borrowing limit before late February.
As part of the deal last year between President Barack Obama and Congress ending the government shutdown, the debt limit, which is just under $17 trillion, was temporarily suspended through Feb. 7.
Lew said that as in the past the Treasury could use certain accounting and cash management methods to push back the point at which it reaches its legal borrowing limit, but officials believe the Treasury is likely to exhaust those measures in late February.
One special timing factor, he noted, is that “the government experiences large net cash outflows in the month of February, due to tax refunds” so its cash balance will be lower than it would be at other times.
Boehner spokesman Michael Steel said that the speaker has said the federal government should not default on the debt “or even get close to it, but a ‘clean’ debt limit increase simply won’t pass in the House.” It remains to be seen what conditions House Republicans might try to impose on a debt limit increase.