Treasury Insists Aug. 2 Debt-Ceiling Deadline Is Real
By: Eamon Javers | CNBC Washington Reporter
The U.S. Treasury Department reiterated Wednesday that unless the U.S. debt ceiling is raised, the U.S. runs out of borrowing authority Aug. 2, and that higher tax receipts will not give it more time.
Treasury said it has not received more tax receipts than expected, as stated in a Barclays capital report.
"Tax receipts were as expected for June and July. The fact remains that the U.S. will exhaust borrowing authority on August 2nd and after that date there is no way to guarantee we will be able to meet all of the nation's obligations," said Colleen Murray, a Treasury spokesperson.
Last week, Barclays issued a note that suggested the Aug. 2 date is not actually the date the U.S. would run out of cash, which is different than the borrowing authority. The borrowing authority is the government's ability to raise money through the issuance of bills, notes or bonds.
"It now appears that tax receipt inflows from July 14 to date have been considerably stronger than we were expecting. This suggests that the date on which the Treasury will run out of cash to pay its obligations might not be August 2; it might be around August 10 instead," the Barclays note said.
Other firms also noted later dates for the depletion of U.S. cash. Nomura said it could be Sept. 9 in a note yesterday.
Currently, total public debt is $14.293,975 million, just $25 million shy of the debt limit. The U.S. has $87 billion of maturing debt next week, and CNBC has learned that Treasury plans to issue $87 billion in new debt early next week to roll over existing debt. The Treasury position is that this would not violate the debt limit because it would simply roll over old debt as opposed to issuing net new debt.
Clarification: An earlier headline in this report mischaracterized the Treasury's position.
