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Lew to Congress: Debt limit is not a ‘bargaining chip’

by Peter Schroeder - 03/13/15 2:01 PM ET

Treasury Secretary Jack Lew told lawmakers Friday the nation’s debt limit should not be used as a “bargaining chip,” as his department took further steps to free up funds under the borrowing cap.

In a letter to congressional leaders, Lew again made the case for a prompt hike to the nation’s borrowing cap, which again takes effect Monday. And he squarely put the responsibility for getting the job done on the shoulders of a GOP-led Congress.

{mosads}“Protecting the full faith and credit of the United States is the responsibility of Congress, because only Congress can extend the nation’s borrowing authority,” he wrote. “No Congress in our history has failed to meet that responsibility.”

After a suspension period, the nation’s legal borrowing limit will be reinstated Monday and automatically increased to cover all government borrowing that occurred since it was suspended at the beginning of 2014.

That means on Monday, the nation will automatically be at the top of its roughly $18 trillion borrowing cap, forcing the Treasury to take “extraordinary measures” to free up funds and continue making payments on money the government owes.

The Congressional Budget Office and outside experts estimate lawmakers will not need to raise the debt limit until sometime this fall.

Lew wrote to lawmakers earlier this month, warning that he would begin to use extraordinary measures as the limit approached.

In his latest letter, Lew said his department would stop issuing debt Monday for a pair of government retirement programs. The Treasury has already stopped issuing special securities for state and local governments that also count against that cap.

While Republicans now control both the House and Senate, lawmakers have yet to come up with a plan to handle the debt ceiling. Senate Majority Leader Mitch McConnell (R-Ky.) has vowed Congress will not shut down the government or default on the nation’s debt.

On Sunday, he told CBS’s “Face the Nation” a debt limit boost could be paired with some other GOP legislation.

“Hopefully, it might carry some other important legislation that we can agree on in connection with it,” he said.

In recent debt limit fights, the White House has refused to negotiate over raising the ceiling, calling the matter too important to be used as leverage.

Tags Fiscal policy Government debt Jack Lew United States debt-ceiling crisis United States public debt