On Wednesday U.S. Treasury Assistant Secretary for Financial Markets Matthew Rutherford reaffirmed Congressman Huelskamp's projection that the U.S. will reach the debt limit within a matter of weeks. According to Congressman Huelskamp's mid-October projection, the U.S. will be able to borrow through January 11, 2013. The latest update from the Treasury projects that borrowing authority will run out before the beginning of 2013. As it did when borrowing authority was exhausted at the end of May 2011, the U.S. Treasury is able to use "extraordinary measures" to meet the federal government's financial obligations such as Social Security payments, pay for the nation's military, and interest on the debt.
The Budget Control Act of 2011 raised the nation's borrowing limit on the condition of spending cuts. These cuts are supposed to take effect starting January 2, 2013. This means that the borrowing authority could be exhausted before a single cut is made. Congressman Tim Huelskamp, a member of the House Budget Committee, voted against the Budget Control Act because he believed it did not go far enough in cutting spending as well as installing structural reforms that would prevent Washington from amassing more debt in the future.
"The Treasury's predictions are no surprise, as we have anticipated hitting the debt limit right around or before the time any actual cuts from the debt deal take effect," Congressman Huelskamp said. "Yet, it is also disappointing that in the 15 months since the debt deal, President Obama and Senate Majority Leader Reid have been unwilling to fix the problems that lead to over-spending and massive borrowing. Every day that goes by without a change of course in Washington is another $4 billion added to our debt. Is that the legacy we want to leave our children?"