Treasury Secretary Janet L. Yellen warned Congress on Friday that the department may not be able to continue paying the country’s bills last September without action from lawmakers.
Yellen wrote to congressional leaders that once the current debt ceiling suspension expires at the end of July, the department will begin using so-called extraordinary measures, or fiscal maneuvers, to “keep the United States from defaulting. obligations”.
It is uncertain how long these measures would avert a default, and Yellen urged congressional leaders to act “as soon as possible” to avoid an event similar to or worse than the deadlock on the 2011 debt limit when the country had the only downgrade in its history.
“The length of time extraordinary measures may last is subject to considerable uncertainty due to a variety of factors, including the challenges of forecasting U.S. government payments and revenues in the months to come, exacerbated by heightened uncertainty in the future. payments and revenues related to the economic impact of the pandemic, ”Yellen wrote.
Yellen wrote that the Treasury would start taking extraordinary measures on August 1, starting with the suspension of sales of special state and local government securities, to technically stay within the borrowing limit, which will be lowered that day. to about $ 28.5 trillion. The agency’s cash balance, which stood at $ 616 billion on Wednesday, is expected to drop to $ 450 billion by the end of the month.