Lawmaker presses Treasury not to unwind ‘extraordinary measures’ during debt-ceiling suspension

The government reached the debt ceiling at the end of 2012. Since then, Treasury has taken several steps to stay under its $16.394 trillion borrowing limit. For example, it has stopped reinvesting certain retirement account funds back into government bonds.

{mosads}Garrett’s letter reflects an attempt to prevent Treasury from resetting these measures, which would give Treasury the ability to use them again after the debt ceiling is reimposed on May 19. That, in turn, could delay a final agreement on a debt-ceiling deal.

Republicans want to avoid this delay because it could reduce pressure to reach a deal as soon as possible.

Treasury has said these “extraordinary measures” give the government about $200 billion in wiggle room when it comes to managing the debt, which could let Treasury avoid the debt ceiling for another few months.

The No Budget, No Pay Act does allow Treasury to take on new debt, but Garrett said it is only meant to let Treasury issue debt to make payments before mid-May.

“It is our intent that this provision prohibits the unwinding of the extraordinary measures that have been employed since the beginning of this year as there is no requirement that such unwinding occur before May 19, 2013,” he wrote.

But a Treasury official told The Hill the government has a statutory requirement to replenish those retirement accounts, including interest. As a result, the Treasury anticipates it will have the full complement of extraordinary measures available on May 19 if it needs them, regardless of Garrett’s request. However, the official declined to specify how long those measures would give the government once it reaches its next borrowing limit before a default occurred.

Garrett asked Treasury to describe all the measures it has taken to avoid the debt ceiling, and an “explanation as to whether these measures will be unwound during the debt limit suspension period” provided under the No Budget, No Pay Act.

Peter Schroeder contributed to this report.

This post updated at 5:29 pm.