WASHINGTON (AP) — After a year with no cap on government borrowing, the federal debt limit has come back into force.
The new limit — $18.133 trillion to be exact — was announced by the Treasury Department on Tuesday. Treasury said the government's total borrowing stands $25 million below the new limit.
Even before the debt limit went back into effect, Treasury Secretary Jacob Lew began taking a series of moves, such as removing investments from government pension funds, to keep the government operating without breaching the new limit.
The Congressional Budget Office has estimated that the bookkeeping maneuvers should keep the government's borrowing below the new limit until October or November. Lew has urged Congress to avoid brinksmanship in raising the debt limit.
A 2011 standoff over the debt limit led to the first-ever downgrade of the nation's credit rating, while a 2013 battle over the budget led to a partial government shutdown. .
The debt limit had been suspended starting in February 2014 under an agreement between Democrats and Republicans to avoid voting on a new level for the debt until after the 2014 congressional elections.
The legislation that put the debt limit suspension into effect said a borrowing limit would return on March 16 at whatever level the debt stood at on March 15. The new level was not revealed until Tuesday with publication of the "Daily Treasury Statement" for Monday.
Lew has already written three letters to Congress detailing the steps he will take to clear headroom for the government to keep up normal borrowing operations without breaching the limit. In his latest letter, Lew declared a "debt issuance suspension period" that will allow him to take investments out of certain pension and disability funds for government employees.
Lew said the suspension period will last until July 30, the last day the House is expected to be in session before the August recess. Lew, however, has the authority to extend the period if needed to buy more time. Under law, Lew must restore all investments removed from the government pension funds once a new debt ceiling is established.
"I respectfully urge Congress to protect the full faith and credit of the United States by acting to increase the statutory debt limit as soon as possible," Lew said.
Republicans now control both the House and the Senate. More conservative GOP lawmakers would like to use the need to raise the borrowing limit as leverage to force President Barack Obama to change his policies in such areas as health insurance and immigration. But Senate Majority Leader Mitch McConnell, R-Kentucky, has said that he is not in favor of using either a government shutdown or the threat of defaulting on the national debt to gain leverage over the administration.
It was a standoff over the debt limit in August 2011 that prompted the downgrade of the nation's credit rating by Standard & Poor's, and in October 2013, another budget dispute prompted a 16-day partial government shutdown.