Partisan fight brews as forecaster warns US could hit debt limit by fall – News Vibe24

    Partisan fight brews as forecaster warns US could hit debt limit by fall - Times of India
    WASHINGTON (Reuters) – The US Treasury Department is expected to exhaust its lending authority in October or November, the Congressional Budget Office said Wednesday as a Democratic-Republican campaign to raise its debt ceiling.
    “If this were to happen, the government would not be able to pay its obligations in full and would be late in making payments for its activities, arrears on its debt obligations or both,” the non-discriminatory CBO said in a statement. He noted that this schedule could change depending on the rate of revenue collection and government spending.
    Failure to resolve disputes over whether government spending cuts should go along with raising the legal debt limit, currently set at $ 28.5 trillion, could lead to a halt in federal government – as happened three times. times in the last decade – or even in bankruptcy.
    President Joe Biden’s colleagues have close scrutiny of both the Senate and the House of Representatives. No senior Republican has mentioned the threat of shutdown in recent public statements. Democrats insist on a “net” increase in the debt limit that is not limited by the fight to cut spending.
    Leading Republican Sen. Mitch McConnell said Wednesday that members of his party are unlikely to support raising the debt limit, given the current Democratic effort for a multi-trillion-dollar investment bill.
    “I can not imagine there will be a single Republican vote to raise the debt ceiling after what we have experienced,” McConnell told Congress-focused Punchbowl News.
    McConnell suggested Democrats tackle the debt limit in a second measure of spending they expect Republicans to pass without a vote in a maneuver called reconciliation.
    Senate Majority Leader Chuck Sumer called McCornell’s remarks “shameful, cynical and utterly political.” Sumer said Republicans did not express such concerns during the presidency of Republican Donald Trump and that part of the debt was related to emergency aid in response to the COVID-19 pandemic.
    “HURRY UP”
    Another Democrat, Ron Wenden, chairman of the Senate Finance Committee, accused Republicans of trying to start a protracted debate over the cost of popular federal programs such as Social Security to cover the debt limit.
    Wyden rejected McConnell’s proposal to attach a debt limit bill to a Democrat-only investment infrastructure bill that could go ahead this fall, saying “we’ll do it fast” through more conventional procedures.
    The Ministry of Finance on July 31st technically faces the legal debt limit. Like the maximum personal credit card, the debt ceiling is the amount of money the federal government is allowed to borrow to meet its obligations. These range from paying military salaries and IRS tax refunds to social security benefits and even paying debt interest.
    As the government spends more than it receives on revenue, it continues to operate by lending more and more.
    For many years, the legal debt limit was raised to a certain dollar level. More recently, Congress has set a limit on a specific date in the future.
    Lawmakers often try to extend borrowing authority beyond the next US election to avoid campaigning. The midterm elections that will determine whether the Democrats retain control of Congress are scheduled for November 2022.
    If Congress does not raise its debt ceiling from its current $ 28.5 trillion by the end of the Treasury Department’s lending authority, Treasury Secretary Janet Yellen is expected to take special steps to avoid government default. Such stop-gap measures are effective only for a short time.
    Failure to raise the debt ceiling could lead to a recurrence of government shutdowns in 2013, January 2018 and 35 days from late December 2018 to January 2019. Other factors also played a role during the game. of these disorders.
    As a sign of Wall Street concern about the approaching limits, the US Treasury’s short-term debt yields rose to around 0.05%, after hovering near zero since the beginning of the pandemic.


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