150 Days: Treasury Says Debt Has Been Frozen at $18,112,975,000,000

By Terence P. Jeffrey | August 12, 2015 | 11:50 AM EDT
The U.S. Treasury building in October 2013 (AP Photo/Carolyn Kaster)

(CNSNews.com) - The portion of the federal debt that is subject to a legal limit set by Congress closed Monday, August 10, at $18,112,975,000,000, according to the latest Daily Treasury Statement, which was published at 4:00 p.m. on Tuesday.

That, according to the Treasury's statements, makes 150 straight days the debt subject to the limit has been frozen at $18,112,975,000,000.

$18,112,975,000,000 is about $25 million below the current legal debt limit of $18,113,000,080,959.35.

On July 30, Treasury Secretary Jacob Lew sent a letter to the leaders of Congress informing them that he was extending a “debt issuance suspension period” through October 30.

In practice, that means that unless Congress enacts new legislation to increase the limit on the federal debt before then, the Treasury will continue for at least the next eleven weeks to issue Daily Treasury Statements that show the federal debt subject to the limit beginning and ending each day frozen just below that limit.

The Daily Treasury Statement for March 13 was the first to show the debt subject to the limit closing the day at $18,112,975,000,000. Every Daily Treasury Statement since then has reported the same thing: the debt closing the day at $18,112,975,000,000.

Every Daily Treasury Statement since Monday, March 16, has also reported the debt beginning and ending each day at $18,112,975,000,000.

 

Table III-C on the Daily Treasury Statement for August 10 says the debt began the month of August at $18,112,975,000,000, began the day of August 10 at $18,112,975,000,000, and closed the day of August 10 at $18,112,975,000,000.

On March 13, Treasury Secretary Jacob Lew sent an initial letter to House Speaker John Boehner and other congressional leaders informing them that he was planning to declare a “debt issuance suspension period.”

“Beginning on Monday, March 16, the outstanding debt of the United States will be at the statutory limit,” Lew said in that letter. “In anticipation of reaching that date, Treasury has suspended until further notice the issue of State and Local Government Series securities, which count against the debt limit.”

On July 29, Lew sent another letter to the leaders of Congress informing them: “I expect to extend the debt issuance suspension period through October 30.”

Lew explained that he believed the Treasury would be able to continue using “extraordinary measures” to keep the debt from exceeding the limit through at least the end of October.

“The effective duration of the extraordinary measures is subject to considerable uncertainty due to a variety of factors, including the unpredictability of September tax receipts and the normal challenges of forecasting the payments and receipts of the U.S. government months into the future,” Lew told the congressional leaders.

“Given this unavoidable uncertainty, Treasury is not able to provide a specific estimate of how long the extraordinary measures will last,” Lew said. “Nonetheless, we believe that the measures will not be exhausted before late October, and it is likely that they will last for at least a brief additional period of time.”

The next day, July 30, Lew did in fact send a notice to the congressional leaders saying: “I have determined that a ‘debt issuance suspension,’ previously determined to last until July 30, 2015, will continue through October 30, 2015.”

In his March 13 letter, Lew explained some steps the Treasury would take during the debt issuance suspension period.

“Because Congress has not yet acted to raise the debt limit,” Lew said in that letter, “the Treasury Department will have to employ further extraordinary measures to continue to finance the government on a temporary basis. Therefore, beginning on March 16, I plan to declare a ‘debt issuance suspension period’ with respect to investment of the Civil Service Retirement and Disability Fund and also suspend the daily reinvestment of Treasury securities held by the Government Securities Investment Fund and the Federal Employees’ Retirement System Thrift Savings Plan.”

Lew informed Boehner that these same actions had been taken “during previous debt limit impasses.”

For example, as CNSNews.com reported, when Secretary Lew declared a debt issuance suspension period in 2013, the Treasury reported the debt subject to the limit was frozen at $16,699,396,000,000 for 150 days, running from mid-May to mid-October of that year.

The Treasury has also posted Frequently Asked Question sheets that explain the actions the Treasury takes during a “debt issuance suspension period” and their statutory basis. The Congressional Research Service has also explained it.

“Under current law, if the Secretary of the Treasury determines that the issuance of obligations of the United States may not be made without exceeding the debt limit, a ‘debt issuance suspension period’ may be determined,” the Congressional Research Service said in a report published on March 27. “This determination gives the Treasury the authority to suspend investments in the Civil Service Retirement and Disability Trust Fund, Postal Service Retiree Health Benefit Fund, and the Government Securities Investment Fund (G-Fund) of the Federal Thrift Savings Plan.

“In addition,” said CRS, “this gives Treasury the authority to prematurely redeem securities held by the Civil Service Retirement and Disability Trust Fund and Postal Service Retiree Health Benefit Fund.”

"The total federal debt consists of debt held by the public and intragovernmental debt," the CRS said in another report published in 2011. "Debt owed to the public represents borrowing from entities other than the federal government, and includes borrowing from state and local governments, the Federal Reserve System, and foreign central banks, as well as private investors in the United States.

"Intragovernmental debt," said CRS, "consists in debt owed by one part of the federal government to another, which are mostly held in trust funds."

The net effect of the Treasury’s actions is that although the publicly held debt of the government continues to fluctuate--as the Treasury redeems maturing debt held by the public and issues new debt held by the public—the overall debt subject to the limit set by Congress closes each business day at $18,112,975,000,000.

Back on March 13, the debt held by the public was $13,083,880,000,000 and the intragovernmental debt was $5,068,578,000,000 according to the Daily Treasury Statement. By the close of business on August 10, also according to the Daily Treasury Statement, the debt held by the public had increased by $37,043,000,000 to $13,120,923,000,000, and the intragovernmental debt had decreased by $38,260,000,000 to $5,030,318,000,000.

But on every business day from March 13 through August 10 the Treasury reported that the federal debt subject to the legal limit set by Congress closed the day at $18,112,975,000,000.