Yellen extends U.S. default deadline to Dec. 15 after highway payment

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WASHINGTON (Businesshala) – US Treasury Secretary Janet Yellen on Tuesday extended the deadline for a potential US government default from December 3 to December 15, giving Congress more time to raise the federal debt limit as lawmakers also largely But let’s consider social spending and climate. bill.

FILE PHOTO: Treasury Secretary Janet Yellen attends a hearing of the House Financial Services Committee on September 30, 2021 in Washington, US. El Drago/Pool via Businesshala

Yellen said in a letter to congressional leaders that the adjustment was “based on our most recent information,” with reference to Treasury tax collection and cash flow data.

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She said the Treasury would be able to transfer $118 billion to the required Highway Trust Fund on December 15, a month after President Joe Biden signed a comprehensive infrastructure bill on Monday. But the transfer would count towards the credit limit, as the money would be invested in non-marketable Treasury securities.

“While I have a high degree of confidence that the Treasury will be able to finance the U.S. government and complete the Highway Trust Fund investment by December 15, there are scenarios in which Treasury will continue to operate with insufficient remaining resources.” Will be released from the US government beyond this date,” Yellen said.

He reiterated his call for Congress to raise or suspend the debt limit “as soon as possible” in order to maintain the full confidence and credit of the United States.

The new estimate gives Democrats in Congress a little more breathing room as they seek to pass a $1.75 trillion measure to provide new energy tax breaks and fund new benefits for childcare, universal preschool and the expanded child tax credit.

Senate Majority Leader Chuck Schumer said on Tuesday that Senate Democrats aim to pass the Build Back Better legislation before Christmas — a goal that has been tempered this fall by wrangling between centrist and progressive Democrats.

avoid default

Democrats aim to pass the spending bill without Republican support. Republicans have also vowed to oppose an increase in the debt limit, pressuring Democrats to pass that measure on their own, complicating an already difficult legislative path for the rest of Biden’s agenda.

“We’ll figure out how to avoid the default. We always do,” Senate Republican Leader Mitch McConnell told reporters on Tuesday.

Schumer said Democrats still hope to raise the debt limit “in a bilateral manner,” but brushed off questions about whether Democrats would go ahead without Republican support.

As the Treasury reported on Monday borrowing was just $25 million below the current $28.88 trillion statutory debt limit, the government is relying on tax collections, a $212 billion cash balance and extraordinary cash management measures to keep government operations going. Can go

“As the federal government’s cash flow is subject to inevitable variability, I will continue to update Congress as more information becomes available,” Yellen said in his letter.

Reporting by David Lauder and Andrea Schallal in Washington; Additional reporting by Susan Cornwell; Editing by Matthew Lewis and Peter Cooney


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