U.S. Treasury’s Wolin on tying debt limit to fiscal discipline debate: Don’t

February 28, 2011

Deputy Treasury Secretary Neal Wolin is urging lawmakers not to tie the U.S. debt limit to the debate on fiscal discipline.

Arguing about the future fiscal path of the United States is fine, but playing games with the debt limit can hurt U.S. creditworthiness, he warned. FINANCE-SUMMIT/WOLIN

The Treasury has said it will reach the statutory debt limit sometime between April 5 and May 31. Once that limit is reached, the Treasury would no longer borrow to meet day-to-day spending needs, including payment of interest on Treasury bills and bonds.

Many Republican lawmakers want to use the debt limit as leverage to push the Obama administration into deeper spending cuts.

Wolin had a message for Congress: keep the discussion over the future fiscal path of the United States separate from what to do about the debt limit.

“This is an issue on which Republicans and Democrats should come together and agree that the basic creditworthiness of the United States should not and cannot be put in question and jeopardy,” he said at the Reuters Future Face of Finance Summit.

“We should have our discussions, our debates and even our fights over what the fiscal future of the United States ought to be and those are happening,” Wolin said.

“What we ought not to is play chicken and hold hostage the full faith and credit of the United States to that other debate.”

It will take some work by the administration to try and make that line resonate with Republicans who were elected in November on platforms of fiscal discipline.

Photo credit: Joshua Roberts (Deputy Treasury Secretary Neal Wolin speaks during Reuters Finance Summit)

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