State Treasurer Curtis Loftis Joins Coalition of State Financial Officers Demanding Clarity on Debt Ceiling Debate
May 31, 2023
State Treasurer Curtis Loftis joined a coalition of 22 state financial officers to ask Treasury Department Secretary Janet Yellen for clarity on the proposed debt ceiling bill being circulated in Congress. In their letter, they request specific information on what will occur if the debt ceiling is not raised in time and a U.S. default occurs.
“The biggest concern we have is the Treasury’s lack of information on payment prioritization,” said State Treasurer Curtis Loftis. “The implication that there are only two options, extending the debt ceiling or defaulting on the nation’s debt, is a false choice. We are looking for Secretary Yellen to provide us with clarification on what payment obligations the department would prioritize to prevent defaulting on the nation’s financial obligations.”
In previous showdowns to address the debt ceiling, research shows that the Treasury had exercised plans to avoid default by prioritizing principal and interest payments in the case of a debt ceiling impasse back in 2016.
State treasurers, auditors and financial officers are asking the Treasury Department to answer two key questions:
- What are the Treasury Department’s current plans to ensure no government default on the debt occurs, irrespective of its inability to satisfy all its obligations?
- What is the detailed explanation, including all relevant data, for the date Treasury expects extraordinary measures to fully cease?
The letter also requests the Treasury commit to making debt payments the highest priority in a worse- case scenario.
A copy of the full letter can be found here.