On Debt Limit, More Treasury Transparency Needed

While the Treasury continues to repeat that its creative-financing options will be exhausted by August 2 and that the $14.3 trillion debt limit must be raised by then to avert a fiscal crisis, this opinion is not unanimous: For instance, Wells Fargo, Barclays, and UBS each recently issued reports suggesting that the Treasury could go days or weeks past that deadline if necessary, and Sen. Orrin Hatch (R., Utah) recently sent a letter to the members of the Financial Stability Oversight Council asking for their measured opinions on the deadline. The growing lack of confidence that August 2 is indeed the last day for negotiations to be safely concluded to prevent a technical default is beginning to confound negotiators.

If Treasury truly believes that it will have exhausted its options to fund the government subject to the debt ceiling by August 2, it could strengthen the prospects for constructive action by making more financial information available that demonstrates this.

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