Congress rapidly headed for debt limit battle

House Speaker Paul Ryan spoke to reporters inside the U.S. Capitol

The debt limit is the maximum amount of debt that the Treasury can issue to the public and to the other federal agencies. He spoke a day after Treasury Secretary Steven Mnuchin warned lawmakers that Congress needs to vote to increase the nearly $20 trillion borrowing cap before taking its annual August vacation.

These extraordinary measures could help the Treasury have sufficient cash to make essential payments "until sometime in the fall of this year" without an increase in the debt limit, according to the nonpartisan Congressional Budget Office. The timing is what I think is the newsworthy thing here.

To deal with this, Mnuchin has resorted to hiring people as "counselors" so that they won't have to be confirmed by the Senate. So we're look at that new timetable. Former Speaker John Boehner, R-Ohio, succeeded in imposing spending cuts upon former President Barack Obama in a major debt limit battle in 2011, but Obama rejected the idea in subsequent debt deals — which cleared Congress with bipartisan support.

Mnuchin has urged lawmakers to move quickly to remove investor doubt about any potential default.

Congress and the administration can discuss future spending cuts, but it was "absolutely critical" to preserve US creditworthiness by paying debts already incurred, he said.

He said that he would prefer a "clean" debt limit increase, which would not include any additional provisions.

Although Mnuchin did not go into detail about the review of the licenses, which were granted as part of the sanctions lifting following the 2015 nuclear deal, he did reveal to the committee that he believes in economic sanctions and that they were the reason Iran came to the negotiating table regarding the nuclear deal. "I can't imagine any scenario in which they don't have to have Democratic votes".

Related News: