US Treasury Secretary Yellen warns tools for debt limit could run out by October
Treasury Secretary warns of perils of waiting for last minute on debt limit
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.US Treasury Secretary Janet Yellen has urged Congress to raise the debt limit, noting that the Treasury Department will run out of money, and measures it can take will be exhausted by October.
In a letter to House Speaker Nancy Pelosi, Ms Yellen said once the debt limit was instated on 1 August, the department took extraordinary measures to finance the government temporarily, such as suspending investments in retirement funds for federal employees.
“Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history,” the letter read.
Ms Yellen said the department is uncertain how long these measures can last given the lack of corporate and individual taxes due on 15 September, and the pandemic.
“However, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October,” she said.
The Treasury Secretary, who is also the former chairwoman of the Federal Reserve, said waiting until the last minute to raise the debt limit can hurt consumer and business confidence, raise the short-term borrowing costs for taxpayers and affect the credit rating of the US government.
“I again note that Congress has addressed the debt limit in recent years through regular order, with broad bipartisan support,” she said.
Ms Yellen’s warning also comes as Congress has to pass legislation to fund the government, as the US fiscal year ends on the first day of October. Similarly, Congress is looking to pass both the bipartisan infrastructure bill the Senate passed this summer and a broad social welfare package known as the budget reconciliation package.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments