The U.S. will reach the debt ceiling by “late February,” Treasury Secretary Jack Lew wrote in a letter Wednesday to congressional leaders.
That’s on the earlier end of the time frame that Lew had previously provided. He urged Speaker John Boehner (R-OH) and other leaders to act to raise the limit soon in order to avert a potentially catastrophic debt default.
“When I previously wrote to you in December, I estimated that Treasury would exhaust extraordinary measures in late February or early March,” he wrote. “Based on our best and most recent information, we believe that Treasury is more likely to exhaust those measures in late February. While this forecast is subject to inherent variability, we do not foresee any reasonable scenario in which the extraordinary measures would last for an extended period of time.”
The statutory debt limit deadline is Feb. 7, after which Treasury may take extraordinary measures to borrow and meet the country’s obligations. But Lew said those measures won’t last beyond the end of next month, due to “large net cash outflows in the month of February, due to tax refunds.” He also noted that the amount of borrowing capacity provided in the recent debt limit increase is “more limited than in 2011 and 2013.”
“I respectfully urge Congress to provide certainty and stability to the economy and financial markets by acting to raise the debt limit before February 7, 2014, and certainly before late February,” Lew wrote.