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United States

US Treasury Secretary Mnuchin urges Congress to raise debt ceiling as second shutdown looms

With funding set to run out on February 8, the US government may have to default if the debt ceiling is not raised

PUBLISHED : Thursday, 01 February, 2018, 12:15am
UPDATED : Thursday, 01 February, 2018, 12:22am

With a second US government shutdown looming, Treasury Secretary Steven Mnuchin called on the Republican-controlled Congress to lift the debt limit “as soon as possible” to pay federal employee benefits and other obligations.

In a letter to congressional leaders and key committee chairmen on Wednesday, Mnuchin said the Treasury Department would continue to suspend payments into federal employee retiree, health and disability funds up to and including February 28.

Congress must raise the nation’s debt ceiling to avoid a government default. The non-partisan Congressional Budget Office has estimated that the US Treasury would exhaust its borrowing options and could run out of funds to pay its bills by late March if lawmakers do not act.

The request comes as Congress is already wrestling with federal spending for the current financial year and faces the possibility of another government shutdown, with approved funding due to run out on February 8.

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Thanks to deep partisan divisions and intra-party squabbles, lawmakers have passed a series of short-term funding bills since the financial year that began on October 1, but have been unable to agree on spending for the rest of that year, which ends September 30.

The government shut down earlier this month for three days when Republicans and Democrats failed to find common ground.

In his letter dated January 30, Mnuchin urged members of the US Senate and House of Representatives “to protect the full faith and credit of the United States by acting to increase the statutory debt limit as soon as possible.”

The request was released publicly on Wednesday, and Mnuchin is expected to meet with Republican President Donald Trump later in the day.

The Treasury Department’s deputy assistant secretary for financial markets, Clay Berry, said in a separate statement the department can fund the government through the end of February.