Federal Government Will Exhaust Extraordinary Measures By Mid October
Here we go again.
According to Treasury Secretary Jacob Lew, Congress must raise the federal government's debt ceiling limit by mid October. If it doesn't, Lew warns, "irreparable harm" may be done to the US economy.
It seems as though we are always talking about the nation's debt ceiling these days, and for good reason - since the beginning of 2009, the debt ceiling has been raised a total of five times. Every time that the ceiling needs to be raised, there is usually a stand-off between the Democrats and Republicans, with the Republicans requesting substantial spending cuts in order to slow the growth of the nation's debt load in exchange for an increase to the debt ceiling.
The upcoming face-off over the debt ceiling will be no different, and you can be certain that it will come down to the last moment before the two sides agree to a deal.
Treasury Secretary Lew has warned that the two sides have until mid-October, at the latest, to come to a deal that will raise the nation's debt ceiling.
Let's not forget that the United States already reached its debt ceiling a few months ago, and the nation is already relying on "extraordinary measures" in order to continue normal operations. Time is running out.
What would happen if the two sides didn't agree to a deal by mid-October?
According to Lew, the federal government, with no borrowing authority, would only be able to operate with cash on hand on any given day. Lew says that the nation will likely have a cash balance of $50 billion by mid-October, and that this money would be "insufficient to cover net expenditures for an extended period of time."
Lew sent a letter warning of the possible consequences of not doing a debt ceiling deal to Nancy Pelosi, Harry Reid, Mitch McConnell, Dave Camp, Sander Levin, Max Baucus, Orrin G. Hatch and every other member of Congress.
The letter can be viewed below:
Source: Treasury.gov - Debt Limit Letter to Congress (*.pdf)
Filed under: General Knowledge