United States about to hit Debt Limit

Treasury Secretary Jacob Lew, pictured, told Congress on Friday that he’ll have to take731px-Jacob_Lew_official_portrait measures to keep the federal government under the legal debt limit once the suspension of the limit expires Sunday.

Lew said the Treasury Department will take “extraordinary measures” to keep the government from defaulting on its debt. This will include a halt to new investments in federal employee pension funds, a moratorium on deposits from state and local governments, and drawing down a $23 billion currency stabilization fund.

Lew did not say how long these measures may last. However, the Bipartisan Policy Center, which tracks the finances underlying the national debt, estimates that the government will run out of borrowing ability completely sometime between Oct. 1 and Dec. 31.

Starting in 1917, Congress has set a debt ceiling to the amount that the Treasury can borrow. After a number of high-stakes battles over raising the debt limit in recent years, Congress suspended the law.

After Sunday, the debt limit will reset at the current level of about $18.1 trillion.

The Treasury Department explained its measures in a five-page document sent to Congress with Lew’s letter. In it, the department specifically ruled out other alternatives — such as selling off government assets to stay under the debt limit.

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