In a letter Wednesday to congressional leaders, Treasury Secretary Jack Lew established a hard deadline of Oct. 17 to raise the debt limit or risk default.Keep in mind that Jack Lew is just the messenger here. The deadline isn't of his choosing: It's entirely driven by the fact that as of October 17, our government won't have enough cash to do what it's already promised to do.
"Since August, we have received quarterly corporate and individual tax receipts and additional information regarding the activities of certain large trust funds, including military retirement trust funds. Treasury now estimates that extraordinary measures will be exhausted no later than October 17," he wrote.
"We estimate that, at that point, Treasury would have only approximately $30 billion to meet our country's commitments. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion. If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history."
The notion that Congress would intentionally force America to default on its debt and obligations is unthinkable, especially when there are undoubtedly more than enough votes on the Hill to raise the debt limit. On the other hand, it's also unthinkable that House Republicans won't push this right up to the last minute possible, because dancing on the edge of disaster is how they get their thrills—and it's what their base believes will finally bring Obama to his knees.
The only way for this cycle to end is for President Obama to continue to stand firm and reject the GOP's threats of economic terrorism. That's exactly what he's promising to do, and the good news is that the worst case scenario here should be that Boehner needs to rely on House Democrats to get the debt limit raised. But until that happens, Republicans are going to try to give him as many opportunities to blink as possible, which will make for an unpleasant roller coaster in the days ahead. But unless he does blink, the end game is clear: The debt limit will be raised, and Republicans will get nothing in exchange, which is exactly how it should be, because the full faith and credit of the United States is not a political bargaining chip.