Treasury Secretary Jack Lew on Thursday moved up the deadline for Congress to raise the nation’s debt limit.
Lew told congressional leaders in a letter on Thursday that the Treasury Department would exhaust special accounting measures no later than November 3, two days earlier than he had previously estimated.
“Operating the United States government with no borrowing authority, and with only the cash on hand on a given day, would be profoundly irresponsible,” Lew wrote in the letter, which was sent to House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-California), Senate Majority Leader Mitch McConnell (R-Kentucky), and Senate Minority Leader Harry Reid (D-Nevada).
If Congress fails to raise the nation’s debt ceiling by that date, the US could risk a first-ever default on its obligations. And the need to resolve the issue comes amid chaos in the House Republican caucus.
Boehner is scheduled to step down as speaker at the end of the month, but his heir apparent – House Majority Leader Kevin McCarthy (R-California) – unexpectedly dropped out of the race to succeed him. And there are no scheduled elections, or settled-upon candidates, for speaker.
A Politico report on Wednesday suggested that House Republican leadership could move a standalone debt-ceiling bill if broader budget talks with the White House and Senate Republicans did not lead to any immediate solutions.
A Boehner aide told Business Insider that while no decisions had been made, a debt-ceiling resolution was on the table.
“The speaker has made it clear that he wants to solve some outstanding issues before he leaves,” the Boehner aide said. “No decisions have been made, but a resolution on the debt ceiling is certainly possible.”
Both Boehner and McConnell entered the year promising to avoid the shutdown and debt-ceiling brinkmanship that has pervaded since Republicans took control of the House in 2011.
Many Washington analysts took McCarthy’s exit from the speaker race and the resulting uncertainty as a sign that raising the debt ceiling could become more complicated. Chris Krueger, an analyst at Guggenheim Securities, suggested there was a 40% probability of some kind of “accident” that would prevent Congress from raising the debt ceiling.
“Everyone who believes that this chaos now emboldens John Boehner to ‘clean the barn’ and pass the debt ceiling should take a deep breath,” he said last week. “With leadership elections now taking up precious time, he will have an even narrower window. And with the Freedom Caucus stock on the rise, we would expect speaker candidates to be even more confrontational.”