Treasury Says It Is Complying With Debt Limit Plan Subpoena

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By Jonathan Nicholson

Aug. 19 — The Treasury Department said it has cooperated with a subpoena from the House Financial Services Committee seeking details of debt limit-related contingency planning, but a spokesman for the panel said Treasury has yet to comply fully.

The panel issued the subpoena May 11, after it said Treasury had not been responsive to its requests that began in December 2013 on what kind of contingency planning the Treasury had done to keep the government from defaulting if the debt limit was not raised or suspended before it ran out of borrowing capacity.

After Treasury Department officials were asked at their quarterly debt management press conference Aug. 5 if they had responded to the subpoena, a Treasury spokesman told Bloomberg BNA in an e-mail, “Treasury has cooperated extensively with the Committee and continues to work with the Committee to provide the relevant information it needs on these issues.”

David Popp, a spokesman for the Financial Services panel, said the committee had received some of what it had requested in the subpoena, but not all.

“Some, but not all documents have been provided. Committee staff continue to review these documents while waiting on Treasury to provide the remainder of the documents requested and fully comply with the subpoena,” Popp said in an e-mail to Bloomberg BNA Aug. 19.

The Treasury Department has been using “extraordinary measures”—essentially accounting moves—to stay just below the $18.113 trillion congressionally set limit on federal borrowing since March. Treasury Secretary Jacob J. Lew has said he expects those moves to give Treasury the ability to keep borrowing and thus pay the government's bills until at least late October but only for a “brief additional period of time” after that.

Private sector estimates have generally given the Treasury a bit more time, with some observers putting the “drop dead” date for raising the debt limit sometime in late November. The date could move forward in time or back depending on a variety of factors, including the pace of federal spending and quarterly business and individual tax receipts between now and November. Because projected debt limit “drop dead” dates have often varied from initial projections, lawmakers from both sides of the aisle have long been suspicious of administration forecasts historically.

‘Extraordinary Stonewalling.'

In announcing the Treasury subpoena in May, when it also subpoenaed the Federal Reserve Bank of New York and the Justice Department, Financial Services Chairman Jeb Hensarling (R-Texas) said, “These agencies have failed to respond to repeated requests—one of which dates back more than two years. In light of this extraordinary stonewalling, the Committee is left with no reasonable alternative but to subpoena long-overdue information.

“The Financial Services Committee has the duty to hold these agencies accountable to hardworking taxpayers. Since they have repeatedly refused to cooperate, subpoenas for documents are a prudent and measured approach—entirely consistent with the rules of the Committee and the House, and prior precedents established by both Republican and Democratic committee chairmen,” Hensarling said.

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com