Lew Moves to Stay Under Debt Limit While Warning of Dire Outcome

Treasury Secretary Jacob J. Lew took more steps to keep the U.S. under the federal debt ceiling and urged Congress to raise the limit to avoid “potentially catastrophic consequences.”

The Treasury Department today declared a “debt issuance suspension period” for the Civil Service Retirement and Disability Fund. The suspension begins today and runs until Feb. 27, Lew said in a letter to House Speaker John Boehner.

Lew also said in the letter that he will be unable to invest fully the Government Securities Investment Fund, or G Fund, of the Federal Employees’ Retirement System, starting today.

The Treasury chief last week urged Congress to raise the debt ceiling as soon as possible, saying U.S. borrowing authority may not last past Feb. 27. The so-called extraordinary measures such the ones announced today are likely to be exhausted by then, he said.

House Republican leaders are preparing a proposal to extend the limit past the Nov. 4 election, said a leadership aide who spoke on condition of anonymity.

Republicans plan to meet today at 5:30 p.m. Washington time, according to an e-mail obtained by Bloomberg News, as the party struggles to gather votes for raising the debt ceiling before borrowing authority runs out.

After a debt-ceiling suspension period ended Feb. 7, the Treasury last week suspended sales of its state and local government series of non-marketable securities, the first of the extraordinary measures.

Before it's here, it's on the Bloomberg Terminal.