Treasury Secretary Steven Mnuchin sent a letter to members warning that unless action is taken to raise the debt ceiling by September 29, the government will not be able to meet all of its financial obligations.

After failing to pass Obamacare repeal before leaving for their August recess, congressional Republicans will return after Labor Day with a deadline looming to raise the debt ceiling. There will be only 12 working days for Congress after members return to deal with the issue.

Wall Street Journal:

The Treasury Department has been employing cash-conservation measures since March, when borrowing hit the formal ceiling of nearly $20 trillion. Those measures are expected to run out in early to mid-October. When they do, the government won't have money to pay interest on debt, write Social Security checks or make millions of other routine payments, unless it can tap credit markets for borrowing to raise additional cash. Missing payments could send financial markets in a tailspin. Lawmakers have managed to resolve bitter feuds over the debt limit before. But markets are starting to reflect angst about Washington's ability to navigate a new showdown given the challenges Republicans have had reaching common ground on issues like health care. Lawmakers leave town with no clear strategy for managing the complex politics around raising the limit when they return. "We just don't know what the process is going to look like this time," said Goldman Sachs political economist Alec Phillips. This will be the first time Republicans will control both chambers of Congress and the White House while navigating a debt ceiling increase. They face resistance within their own party. In the past, conservative Republicans sought to pair increases in the borrowing limit with steep spending cuts. Some argued against raising the limit at all. This time the GOP will have to own the consequences if the government defaults on debt or fails to make other payments. Mr. Mnuchin has made clear the administration wants to see the debt limit increased, with no strings attached. But GOP leaders will almost certainly need to rely on Democratic support to get any type of increase to the president's desk, something Democrats might be reluctant to provide without something in return. They have been unified in opposition to Republicans on other issues. The path to raising the debt limit will be the first major political test for Mr. Mnuchin, a Washington novice who has been intensely focused on the Trump administration's forthcoming tax overhaul proposal. "Based upon our available information, I believe that it is critical that Congress act to increase the nation's borrowing authority by September 29," Mr. Mnuchin said in last week's letter.

In the past, every president, Republican or Democrat, has said he wants a "clean" debt ceiling bill with no add-ons and no conditions. And every president has failed to get it.

The temptation to posture, to rant, to play politics with the debt ceiling is just too great to resist. Each party tries to make the other look bad in the process. Both parties look to pass pet projects as amendments to raising the debt ceiling. And recent history suggests that the party not in charge of the White House will look to embarrass the president into signing a bill with amendments he never wanted.

Congress isn't the only party in this process that plays politics with the debt ceiling. The Executive Branch always paints a much more dire picture of failure to act by its "deadline" than many experts believe is necessary. In this case, the Treasury Department will have about $25 billion on hand at the end of September. Can the government pay all our bills if it can't borrow? And if it can't, what exactly can it pay? Some conservatives may wish to test that hypothesis.

Democrats will not bail Republicans out of this mess – and a mess it is almost certain to be. If you thought Obamacare repeal was a debacle, wait until the factions start lining up to support or oppose a debt ceiling increase. As for Democrats, they are likely to pop some popcorn, sit back, and be entertained by the GOP tying itself in knots over the increase. It won't be a pretty picture.

All of this is unnecessary, of course. The money has already been appropriated. If Congress doesn't want to deal with a debt ceiling increase, it should balance the budget when it passes appropriations bills. Otherwise, this exercise in pure politics is nothing more than atmospherics.