Yellen Says Treasury Must Extend Special Measures on Debt
(Bloomberg) -- Treasury Secretary Janet Yellen warned congressional leaders that while the recent law boosting the federal debt limit should tide federal finances over until Dec. 3, her department must again use extraordinary measures to avoid breaching the ceiling.
“The recent increase in the debt limit provides only a temporary reprieve,” Yellen said in a letter Monday that laid out the details of federal accounts that will go without certain contributions in coming weeks.
The letter serves as an early warning that lawmakers will need to come up with a longer-lasting solution to avert a U.S. default. Yellen had said the Treasury would run out of cash around Oct. 18 without boosting the limit. Congress enacted a limited increase in the debt limit last week, following a tense partisan standoff.
Senate Republican leader Mitch McConnell has warned that his party won’t deliver the votes in that chamber that would be needed to cut off debate on another debt-ceiling increase. GOP members have called on Democrats to use for the debt limit the same filibuster-bypassing legislative method as they used for a $1.9 trillion pandemic-relief bill in March and that they’re planning to use for a sweeping social-spending bill in coming weeks.
Democrats have rejected that option, citing Republican contributions to the current debt and the history of bipartisan votes on addressing the debt limit.
“I respectfully urge Congress to act to protect the full faith and credit of the United States,” Yellen said in her letter to congressional leaders of both parties.
While the legislation enacted last week was designed to only give the Treasury borrowing authority until Dec. 3, Wall Street economists have said the department might be able to keep going for several more weeks, depending on how cash flows shape up.
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