Treasury Secretary Steven Mnuchin says federal borrowing limit must increase by Sept. 29, giving lawmakers little time after recess to act
It is going to be a tight squeeze. Treasury’s cash balance is expected to drop to near $25 billion in September—a precariously low level, especially in the event of some unforeseen shock, such as a severe natural disaster, global crisis or unexpected drop in revenue.
Strategic challenges hang over Mr. Mnuchin’s options. When President Barack Obama was in power, some Republicans challenged the White House to allow cash to run down and prioritize some payments, such as interest on debt, over others, such as discretionary spending. That idea could return.
.. Complicating matters, the debt limit isn’t the only fiscal fight lawmakers are bracing for when they return from the August recess.
The showdown will coincide with the end of the fiscal year on Sept. 30, and the prospect of a government shutdown if Congress fails to authorize new spending for 2018. That could make the debt limit increase more difficult to address, if lawmakers get bogged down in a fight over spending.