Treasury Secretary Jack Lew sent a letter to Speaker John Boehner, R-Ohio, Wednesday, informing him that the federal government's debt limit must be raised before Oct. 17, or the United States government will not have sufficient cash on hand to meet all of its financial obligations.
Earlier, Lew had informed Boehner that the federal government's borrowing capacity would be exhausted "in the middle of October." Now, Lew writes:
Since August, we have received quarterly corporate and individual tax receipts and additional information regarding the activities of certain large trust funds, including military retirement trust funds. Treasury now estimates that extraordinary measures will be exhausted no later than Oct. 17. We estimate that, at that point, Treasury would have only approximately $30 billion to meet our country's commitments. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion. If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.
Lew's letter Wednesday also attacked recently passed House Republican legislation prioritizing which financial obligations the Treasury Department should pay first if the debt limit isn't raised. "Any plan to prioritize some payments over others is simply default by another name," Lew alleges. "It would represent an irresponsible retreat from a core American value: We are a nation that honors all of its commitments."
President Obama has repeatedly refused to negotiate over raising the debt limit, despite doing exactly that in the past. And Lew's letter again affirms Obama's current stated policy of not negotiating on the debt limit. But the letter also says that Obama "remains willing to negotiate over the future direction of fiscal policy."
House Republicans will reportedly vote on legislation this week that will raise the debt limit in exchange for a year-long delay of Obamacare.