Minister of Finance Janet Yellen
Janet Louise Yellen: Democrats contemplate the nightmare of the September Congress as they shoot to spend fights amid the threat of a government shutdown Five tax issues to watch as Democrats draft a bill.5T MORE Wednesday warned congressional leaders that the United States is on track to default on national debt in October if the White House and Congress cannot raise the debt limit.
In a Wednesday letter, Yellen said the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal debt limit sometime next month.
“Once all available measures and available cash were exhausted, the United States of America could not meet its obligations for the first time in our history,” Yellen said.
“Given this uncertainty, the Treasury Department cannot provide a specific estimate of how long the extraordinary measures will last. However, based on the best and most recent information, the most likely outcome is that the extraordinary measures and in cash will run out during the month of October, “he continued.
Yellen wrote the letter to Speaker Nancy Pelosi
Nancy PelosiManchin would support spending plan of up to .5T: Overnight Health Care report – United States achieves new White House vaccine milestone that House Democrats present messages for .5T spending plan MONTH (D-California), leader of the House minority Kevin McCarthy
Kevin McCarthy Hill’s Report 12:30: Congress’ laundry list grows. Spotlight becomes GOP McCarthy on January 6th. GOP poll seeks to keep focus on Afghanistan as Dems moves Biden spending plan.5T MORE (R-California), leader of the Senate majority Charles Schumer
Chuck Schumer: Virginia Democrat Introduces Tax Credit for Electric Commercial Vehicles (DN.Y.) and leader of Senate minorities Mitch McConnell
Addison (Mitch) Mitchell McConnell Biden’s accusation is just a battleground in the Republican total election war Democrats contemplate the September nightmare. (R-Ky.).
The Treasury Department has taken so-called extraordinary measures to prevent the U.S. from defaulting on national debt since the federal debt limit was re-imposed on August 1st. the inability of the United States to pay its debts could provoke debilitating shockwaves through the financial system.
Yellen urged lawmakers for months to raise the debt limit before imposing it again in August, warning that a delay could “cause irreparable damage to the U.S. economy and global financial markets.”
He has since asked Congress to give the Treasury the chance to pay off debts already approved by previous presidents and majorities in Congress.
“Waiting until the last minute to suspend or increase the debt limit can cause serious damage to the confidence of businesses and consumers, increase the costs of short-term loans for taxpayers and negatively affect the credit rating of United States, “Yellen wrote.
“At a time when American families, communities and businesses are still suffering the effects of the ongoing global pandemic, it would be particularly irresponsible to jeopardize the full faith and credit of the United States.”
Still, Democrats and Republicans are locked in a deadlock over who has the responsibility to protect the full faith and credit of the U.S.
The White House and Democratic leaders plan to link an increase in the debt limit to another mandatory government funding bill, daring Republicans to provoke a government shutdown and default by opposing the measure.
“We fully expect Congress to act swiftly to suspend the debt limit and protect the full faith and credit of the United States, and we expect them to do so in a bipartisan manner as they did three times during the previous administration,” he said. a white House Official Tuesday.
But Republicans have refused to raise the debt ceiling unless spending cuts and debt reduction programs are adhered to.
Democrats could also try to stop a debt ceiling increase on the $ 3.5 trillion bill for infrastructure, climate and social services trying to go through budget reconciliation. Passing the bill would only require simple majorities in each party, but the package may not be ready to vote before the U.S. defaults on the debt limit.
Yellen has warned for months that the U.S. could default as soon as October, explaining that the economic impact and fiscal response to the coronavirus pandemic makes it difficult to determine exactly when. Earlier analysis by the Congressional Budget Office and the Bipartisan Policy Institute (a think tank that closely tracks the debt limit) showed that the U.S. would not reach a default until November.
Updated at 10:14 a.m., Morgan Chalfant contributed.