Yellen Hints at a ‘Few Days’ of Room After Debt-Limit Deadline
(Bloomberg) -- Treasury Secretary Janet Yellen suggested Thursday that the U.S. government may have a few days of cash left after the Oct. 18 date she gave earlier this week before a potential default linked to the debt limit.
“It will be impossible for Treasury on that day, or a few days thereafter” to pay the nation’s bills since cash flow will be “limited” and “will be run down quickly,” she said in response to questions during a hearing before the House Financial Services Committee.
Yellen also said she would support a permanent repeal of the debt limit -- as opposed to the temporary suspension under consideration now -- and reiterated that a default would be a “catastrophe” for the country.
The comments offer more specificity than Yellen’s letter to Congress on Monday, when she said that “estimates regarding how long our remaining extraordinary measures and cash may last can unpredictably shift forward or backward.” She also wrote that after Oct. 18, “we expect Treasury would be left with very limited resources that would be depleted quickly.”
Separately on Thursday, Senate Democratic Leader Chuck Schumer ratcheted up pressure on Republicans in their feud over raising the national debt limit, announcing he will seek a vote “as early as next week” on House-passed legislation suspending the legal ceiling, which came back into effect Aug. 1 following a two-year hiatus.
Senate GOP leader Mitch McConnell argues that Democrats alone are responsible for raising the limit since they are pursuing a partisan multitrillion-dollar tax and spending plan. Schumer accuses Republicans of trying to “dine and dash” on the cost of their 2017 tax cuts and wants their fingerprints on the vote to raise the debt ceiling.
The debt-limit fight has become part of a struggle between the parties to shape public perceptions of President Joe Biden’s agenda heading into next year’s midterm congressional election.
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