The United States will hit a $14.3 trillion statutory limit on its debt slightly later than estimated, the Treasury said Wednesday as it unveiled a still-hefty debt auction schedule.
Treasury officials said the limit would now be hit between April 5 and May 31, versus a previous estimate of end-March to mid-May. The later time frame reflected an upward revision to estimates of tax receipts and a downward revision to projected borrowing from the Social Security and Medicare trust funds.
The officials said they were proceeding with borrowing plans under the assumption that Congress will raise the limit without a protracted battle.
“We do not have a have particular figure that we have put to Congress. That is their prerogative to offer that,” Mary Miller, Treasury assistant secretary for financial markets, told a news conference.
The Treasury can take special measures such as dipping into government pension funds, to delay hitting the limit up to another eight weeks, potentially pushing the day of reckoning into July. It plans to provide a new estimate on the timing at the start of every month.
The Treasury has begun to draw down a $200 billion Federal Reserve supplementary financing account, and Miller said the next step would be to halt issuance of debt to state and local governments, which has totaled $36.4 billion since October.
While analysts expect Congress will raise the debt ceiling, there will be skirmishes along the way.
A number of Republican lawmakers have voiced opposition to increasing the limit without significant concessions on spending cuts from the administration. A contentious debate is expected after the Obama administration unveils its proposed fiscal 2012 budget this month.
“Given the history of debt limit fights, brinkmanship will rule the day, and nothing of significance will happen in February,” said Pierpont Securities analyst Stephen Stanley adding that a resolution could drag out “to the bitter end.”
Miller noted that financial markets have been patient as the debt limit saga unfoldsand added that the government had no plans to selectively cut or delay payments to employees or contractors.
That “would in a sense be defaulting on our obligations, so it’s not a path that we want to go down,” she said.
Treasury prices were mostly weaker on Wednesday, with the yield on the benchmark 10-year note at 3.47 percent.
Miller added that accelerating sales of assets, such as shares in bailed-out companies or mortgage-backed securities, was not an option that Treasury wanted to consider for staying under the debt limit.
