Mnuchin Ready for Short-Term Debt Cap Increase to Avoid Breach By Bloomberg

© Bloomberg. Steven Mnuchin in Chantilly on July 18.


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© Bloomberg. Steven Mnuchin in Chantilly on July 18.

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(Bloomberg) — Treasury Secretary Steven Mnuchin signaled he would agree to a short-term debt limit increase if Congress can’t reach a long-term solution that includes a budget deal before its August recess.

Mnuchin has said that under one of the Treasury Department’s most conservative estimates, the U.S. will be at risk of defaulting on payment obligations in early September — before lawmakers are scheduled to return from their summer recess on Sept. 9.

“I’ve been clear in communicating to leadership in both parties in Congress that they should raise the debt ceiling before they leave, whether it’s a permanent raise or a temporary raise, we don’t want to run into any problem in the first week of September,” he said.

“The preference from all three sides — the administration the House and the Senate — would be to try to get an agreement that includes both the caps deal offset and raising the debt ceiling,” he said during a press briefing in Chantilly, France, where he was meeting with Group of Seven counterparts. “I think we’re very close to having an agreement.”

Mnuchin said the Congress and the administration has agreed on spending numbers for both years and are now working on offsets.

House Speaker Nancy Pelosi said earlier this week she sees “forward motion” as her talks with Mnuchin continue. The pair have another call scheduled on Thursday, Mnuchin said, to continue to negotiate higher spending levels in a budget deal that congressional leaders want to attach to a bill raising the debt limit before the August break.

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