Treasury secretary warns US could again hit debt limit on December 15
US Treasury Secretary Janet Yellen has warned that the United States may run out of money by December 15, calling on lawmakers to raise the country's debt limit to avoid a default.
The deadline for a potential default had been Dec. 3, but Yellen on Tuesday extended it to Dec. 15.
The additional 12 days means Congress will have more time to reach a deal on how to lift or suspend the debt ceiling. However, if lawmakers fail to do so before the so-called drop-dead date, the US government would default for the first time ever.
In a letter to congressional leaders, Yellen explained the revised estimate is, in part, the result of President Joe Biden’s enactment of the $1 trillion infrastructure plan on Monday.
“Yesterday, the President signed the Infrastructure Investment and Jobs Act, which appropriates $118 billion for the Highway Trust Fund,” she wrote. “These funds must be transferred into the Highway Trust Fund within one month after the enactment of the legislation, and the transfer will be completed on December 15.”
Yellen said she has “a high degree of confidence” that her department will be able to finance the government through Dec. 15, and “complete the Highway Trust Fund investment.” However, she noted, “there are scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the US government beyond this date.”
She said, "To ensure the full faith and credit of the United States, it is critical that Congress raise or suspend the debt limit as soon as possible."
Senate Minority Leader Mitch McConnell has said his party would not help Democrats avert the next debt limit cliff, after 11 Republican senators wound up voting to raise the nation’s borrowing limit by $480 billion last month.
Instead, McConnell insists that Democrats use the budget reconciliation process, which they are already using to pass Biden’s sweeping safety net bill, to act alone on the debt limit.
In addition to being time-consuming, such a pathway might require the majority party to raise the debt limit to a specific number, which will in turn, further fuel Republican campaign attacks characterizing Democrats as irresponsible spenders.
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