Yellen extends to December 15 due to debt default

Yellen extends to December 15 due to debt default

Washington — Treasury Secretary Janet Yellen told Congress on Tuesday that she believes she will run out of room to maneuver to avoid the country’s first default soon after Dec. 15.

In a letter to congressional leaders, Yellen said she believes the Treasury may be left with insufficient resources to continue funding the government beyond December 15.

Yellen’s new date comes 12 days after the December 3 date she gave in a letter to Congress on October 18. This letter was based on the fact that Congress had just passed a $480 billion increase in the debt limit as a gap stop. Measurement.

As she has done in the past, Yellen urged Congress to quickly address the debt limit to remove the possibility of default on the nation’s obligations.

“To ensure the full confidence and credit of the United States, it is critical that Congress raise or suspend the debt limit as quickly as possible,” Yellen wrote to Congressional leaders.

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Yellen repeatedly warned that failure to handle the debt limit and allowing the government to default would be disastrous and potentially push the country into recession.

Yellen said in her letter that the extra time reflects more recent estimates of government revenue and spending, as influenced by an infrastructure bill that President Joe Biden signed into law on Monday. This legislation requires the Treasury to transfer $118 billion by December 15 to the Highway Trust Fund.

Yellen then said that while she has a “high degree of confidence that she will be able to fund the US government through December 15” and complete the Transfer of Highway Trust Funds, there are scenarios in which the government will be left with insufficient resources to fund operations after the December 15 date, She said.

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The need to raise or suspend the debt limit is just one of the budget problems facing Congress. Lawmakers must also approve the budget by December 3, when current funding measures to close the gap will end. Failure to do so will result in a government shutdown.

Democrats aim to approve $1.75 trillion in measures to expand the social safety net and tackle the threats of climate change. House Speaker Nancy Pelosi said she hopes the House can pass the measure, which Republicans oppose, this week. It must also pass the Senate.

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