Government aid efforts to help victims of Hurricane Harvey could move up the debt ceiling deadline, Treasury Secretary Steven Mnuchin said Thursday.
“There could be some impact of a couple of days,” Mnuchin said in a CNBC interview.
The U.S. Treasury technically hit the debt ceiling in March and has been using loopholes it calls “extraordinary measures” to continue borrowing in order to pay its bills since then. The Treasury had said those measures would be exhausted on Sept. 29, which would lead to a U.S. debt default without Congressional action.
The date is calculated based on how much revenue the government brings in, how much it spends and how much it has to borrow to make up the difference.
{mosads}If Congress passes a previously unplanned multi-billion-dollar spending measure to help victims of Harvey, however, it may reach that limit sooner.
Those few days could add significant pressure to Congress, which only has 12 legislative days planned in the month of September, and faces several crucial deadlines.
The fiscal year ends on Sept. 30, and without new spending provisions, the government will shut down afterward. Congressional leaders have increasingly been leaning toward passing a three-month stopgap measure to continue current spending levels for the first three months of the new fiscal year, and raising the debt ceiling in the same bill.
If the debt deadline moves up just four days, for example, it could significantly narrow the window Congress has to pass the legislation when it returns from its August recess on Sept. 5.
Some observers believe the debt ceiling deadline set by the Treasury — conveniently linked to the deadline for funding the government — left some wiggle room before the actual date funds would run out.
Shai Akabas, who tracks the debt for the Bipartisan Policy Center, estimates that government might be able to squeeze another week or two out of its extraordinary measures, depending on how much revenue comes in during September.
In the event that Congress seemed far from reaching a deal by the deadline, Mnuchin could, in theory, push it back a few days. That, Akabas said, would be necessary to calm markets, even before the Treasury technically defaults.
“If we got past the point that the Secretary said it was critical to act by and we didn’t see any plan in the works, you’d see investors react,” he said.