Washington – The US Treasury Secretary Jacob Lew told Congress that he had decided to extent a measure that will allow the US to remain under the $16.7 debt ceiling. Lew is making the move because the Republicans and Democrats cannot agree on raising the debt limit.

Today was the day that one of the extra-ordinary measures Lew is using to stop the debt from breaking through the ceiling was to expire. He has now extended the measure until October 11th. The move suspends payments into the Civil Services Retirement and Disability Fund until after that date. This accounting move will free up $13 billion below the debt limit. In a letter to Congress Lew nevertheless encouraged Congress to take action on the issue of the debt ceiling: “I respectfully urge Congress to protect America’s good credit and avoid the potentially catastrophic consequences of failing to act by increasing the debt limit in a timely fashion”. The Congressional Budget Office predicts that the extraordinary measures will prevent the debt ceiling from being breached until October or even November. The Treasury says that it will probably be capable of financing government operations until at least after Labor Day on September 2. The Washington-based Bipartisan Policy Center claims that the limit will be reached between mid-October and mid-November unless Congress takes action. The Republicans so far insist that they will not approve an increased debt ceiling without spending cuts. On July 28 Lew said in a TV interview that “Congress needs to do its job” and raise the limit “in a way that doesn’t create a crisis.Just two years ago the Republicans and White House battled for months over the debt ceiling issue and did not solve it until the very day , August 2, 2011, that the Treasury Department warned that US borrowing authority would expire. Lew has warned Congress: “Waiting until the last possible moment to act would risk financial market and economic damage that is completely avoidable and irresponsible to our investors and our country”. In reality the US debt is already more than the debt ceiling but the extra-ordinary measures simply are accounting devices used to disguise this by suspending payments that would otherwise be made.