* New debt limit reset at $16.7 trillion
* No movement seen in Congress on budget talks
By David Lawder
WASHINGTON, May 20 (Reuters) – The U.S. government added
$306 billion in new debt during a four-month suspension of the
federal borrowing limit, the Treasury Department said on Monday,
but there was no sign on Capitol Hill of any movement toward a
budget compromise.
As of Friday, the last business day before the debt limit
was officially reset on Sunday, the Treasury said in its daily
statement that U.S. debt subject to the limit was $16.7
trillion, compared to $16.394 trillion prior to the suspension
in February.
The new $16.7 trillion level effectively becomes the new
debt limit, and the Treasury has begun to deploy its so-called
extraordinary cash management measures to keep from exceeding
that cap. Treasury Secretary Jack Lew said last week that the
department could continue paying the government’s bills until
after Sept. 2, while the Congressional Budget Office has said
the deadline may stretch as late as November, given the recent
strength of U.S. revenues.
House Republicans engineered the debt limit extension as
part of a strategy to coax the Democratic-controlled Senate to
pass its first budget resolution in four years. Congress would
then debate each party’s fiscal visions.
The Senate passed a budget reflecting Democratic priorities
to preserve social safety net programs that would require the
wealthy to pay nearly $1 trillion more in taxes by eliminating
deductions. It contained only modest spending cuts.
The Republican plan, like those passed in previous years,
includes no new revenues and relies heavily on deep cuts to
social programs such as the Medicaid healthcare program for the
poor and disabled, while keeping the savings from automatic
spending cuts in place.
With Congress consumed by a widening scandal over the
Internal Revenue Service’s targeting of conservative groups for
extra scrutiny, congressional aides say there have been no new
developments.
House Budget Committee Chairman Paul Ryan of Wisconsin, who
was the 2012 Republican vice presidential candidate, and his
Democratic Senate counterpart, Patty Murray of Washington state,
continue to discuss forming a conference committee.
Democrats want to start a formal, public conference to work
out the differences between the two budget plans.
But Ryan wants to establish a “framework” for an agreement
before starting that process and a Ryan spokesman said: “We
remain in contact with Murray and her staff.”
The Republicans who control the House have not yet coalesced
around a strategy for approaching the debt limit. Some lawmakers
last week voiced support for linking the next debt limit hike to
policy goals such as tax reform or approving the Canada-to-Texas
Keystone XL oil pipeline. Many say they won’t vote to raise the
debt cap without further action to reduce deficits.
“We’ve just begun the conversation with members – and, more
importantly, the American people – about what will be necessary
to raise the debt limit, consistent with the ‘Boehner Rule’ of
equal or great cuts and reforms,” said Michael Steel, a
spokesman for Republican House Speaker John Boehner.
Boehner, who was one of the key players in the 2011 debt
limit negotiations, has said that for every dollar increase in
the debt limit he wants an equal amount or more in debt
reduction over 10 years.
Fearing that sharply reduced estimates of federal deficits
for the next few years will promote stasis in Congress, the
Campaign to Fix the Debt, a group advocating deficit reduction,
launched a new ad campaign warning Washington lawmakers not to
“sweep our debt problems under the rug.”
“Too many of our political leaders are trying to ignore our
historically large national debt, but doing nothing won’t make
it go away,” said Maya MacGuineas, head of the Campaign to Fix
the Debt.
(Reporting By David Lawder; Editing by Paul Simao)
