Nancy Pelosi, the Democratic leader in the U.S. House of Representatives, on Friday expressed support for quick action this summer to raise Washington’s borrowing authority rather than leaving the legislation until September or beyond.
Treasury Secretary Steven Mnuchin has been urging Congress to raise the debt limit before it leaves for a long summer recess that is scheduled for the entire month of August.
Trump administration officials have cited lagging revenues flowing into the Treasury as reason for Congress to act promptly. There had been earlier speculation that the Treasury could manage under the existing ceiling until sometime this fall.
“Everything we’re hearing is that it should probably be done before we leave the end of July,” Pelosi told reporters.
She added, “Might as well do it in a way and be in front of it instead of behind it,” referring to the potential financial market upheavals that could ensue during the August recess if all of Treasury’s tools for staving off a default were being exhausted amid inaction by lawmakers.
In 2011, the United States came close to what would have been a historic default as Republicans withheld their support for a debt limit increase in order to win deep budget cuts.
Earlier on Friday, National Economic Council Director Gary Cohn told CNBC that while there is a preference for a debt limit bill from Congress that is “clean” and unencumbered by legislative add-ons, “If we need to get things attached to get it through (Congress) we’ll attach things.”
Pelosi warned Republicans who control the House and Senate that she has no “intention of lifting the debt ceiling to enable the Republicans to give another tax break to the wealthy in our country” that would deepen the federal debt or be paid for by budget cuts to education, medical research and other vital programs.
Democrats generally have supported “clean” debt limit increases, while Republicans are deeply divided, with some conservatives insisting that borrowing authority be raised only if an equal amount of spending cuts are enacted.
Some conservative Republicans also have been pushing legislation that would allow Treasury to “prioritize” its debt payments if borrowing authority was running out. It was not clear whether they would want to attach such language to a debt limit increase bill.
(Reporting By Richard Cowan; Editing by Alistair Bell)