Dear Mr. Speaker:

I’m writing to follow up on my previous letters regarding the debt limit and to supply additional information regarding the Treasury Department’s ability to proceed to finance the operations of the federal government.

In my January 13 letter, I noted that it was unlikely that money and extraordinary measures can be exhausted before early June. After reviewing recent federal tax receipts, our greatest estimate is that we will likely be unable to proceed to satisfy all of the federal government’s obligations by early June, and potentially as early as June 1, if Congress doesn’t raise or suspend the debt limit before that point. This estimate is predicated on currently available data, as federal receipts and outlays are inherently variable, and the actual date that Treasury exhausts extraordinary measures may very well be quite a few weeks later than these estimates.

It’s unattainable to predict with certainty the precise date when Treasury will likely be unable to pay the federal government’s bills, and I’ll proceed to update Congress in the approaching weeks as more information becomes available. Given the present projections, it’s imperative that Congress act as soon as possible to extend or suspend the debt limit in a way that gives longer-term certainty that the federal government will proceed to make its payments.

Moreover, Treasury is suspending the issuance of State and Local Government Series (SLGS) Treasury securities. SLGS are special-purpose Treasury securities issued to states and municipalities to assist them comply with certain tax rules. When Treasury issues SLGS, they count against the debt limit. Treasury will take this motion to administer the risks related to the debt limit, nevertheless it just isn’t without costs, as it can deprive state and native governments of a vital tool to administer their funds.

Now we have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit could cause serious harm to business and consumer confidence, raise short term borrowing costs for taxpayers, and negatively impact the credit standing of the US. If Congress fails to extend the debt limit, it could cause severe hardship to American families, harm our global leadership position, and lift questions on our ability to defend our national security interests.