Yellen tells Congress that U.S. will run out of debt ceiling flexibility on Oct. 18
Source: Washington Post
Treasury Secretary Janet Yellen on Tuesday told Congress that the U.S. will run out of flexibility to avoid a breaching the debt limit on Oct. 18, setting a new deadline for lawmakers to avoid a catastrophic default on its payment obligations. It is uncertain whether we could continue to meet all the nations commitments after that date, Yellen wrote in the letter to House Speaker Nancy Pelosi (D-Calif.).
Yellens letter came less than 24 hours after Senate Republicans blocked a bill that would suspend the debt ceiling and prevent a government shutdown on Friday. Senate Republicans have said they would support a stand-alone measure to prevent the shutdown but they largely have opposed efforts by Democrats to suspend the debt ceiling. The U.S. government runs a large budget deficit, spending far more than it brings in through tax revenue. To address this imbalance, the government borrows money by issuing debt. But it can only issue debt up to a limit set by Congress. That limit is repeatedly raised or suspended, and lawmakers are now up against another cap.
If Congress doesnt raise the limit, the Treasury Department will not have the capability to pay all of its bills. Yellens new letter lays out that this crunch will really tighten after Oct. 18. She called on Congress to act as swiftly as possible, an overture she has tried for weeks without much success. Yellens letter stressed that even narrowly avoiding a debt default could hurt taxpayers. The uncertainty around Americas ability to meet its payment obligations could make investors more nervous about buying U.S. debt, which would drive up borrowing costs for taxpayers.
We know from previous debt limit impasses that waiting until the last minute can cause serous harm to business and consumer confidence, raise borrowing costs for taxpayers, and negatively impact the credit rating of the United States for years to come, she wrote in the letter. Failure to act promptly could also result in substantial disruptions to financial markets, as heightened uncertainty can exacerbate volatility and erode investor confidence.
Read more: https://www.washingtonpost.com/us-policy/2021/09/28/yellen-debt-ceiling/
wryter2000
(46,025 posts)Are they really unwilling to change the filibuster for this? How idiotic can they be?
SoCalDavidS
(9,998 posts)NOTHING is going to change their minds.
Regardless, they are not alone. There are several others. They are just willing to take the heat and publicize their views. But make no mistake, there are several Democrats who will Never vote to eliminate it.
yaesu
(8,020 posts)make them deal with the consequences
Rebl2
(13,481 posts)exactly what republicans want so they can turn around and blame democrats and Biden. It is way past time to get rid of the debt limit/ceiling. I dont know why rs think it would be Democrats fault since they are the ones blocking it.
Bayard
(22,035 posts)This would be 100x worse. U.S. will be seen as a very bad credit risk, and interest rates will rise accordingly.
Really stupid. I agree--rethugs think this is the greatest way to scuttle Biden's presidency.
AZLD4Candidate
(5,656 posts)But I guess stopping Pres. Biden and owning the libs is more important than running an effective, efficient government that pays its bills.
Fiendish Thingy
(15,568 posts)FBaggins
(26,727 posts)A huge drop in their stock price is precisely why theyre telling Manchin to block things.
Fiendish Thingy
(15,568 posts)If the debt ceiling isnt lifted, the market will crash, and Manchins rich donors wont escape.
The drop they would experience if the reconciliation bill passes would pale in comparison.
FBaggins
(26,727 posts)Nothing that I've seen.
Fiendish Thingy
(15,568 posts)FBaggins
(26,727 posts)The debt ceiling increase already can't be blocked by a filibuster. There's no need for a new carveout when the law has allowed for that for almost five decades now.
Fiendish Thingy
(15,568 posts)FBaggins
(26,727 posts)It's one thing if they could say "Hey... we can't raise the debt ceiling because of the filibuster". Manchin still wouldn't be likely to buy that... but they can't say that. All they can say is - "Hey... we can raise the debt ceiling despite the filibuster. But if we do it that way, we have to actually put a new dollar figure on it and that would be inconvenient. So we don't want to." or "We've had this option for months and didn't want to use it... now we don't want to wait the 2-3 weeks it will take to use reconciliation. That will spoil our vacation time."
Not exactly the stuff of critical constitutional carve-outs like voting rights would be, eh?
Fiendish Thingy
(15,568 posts)So, at this moment, it appears that Manchin is blocking either route to lift the debt ceiling. It seems he would like to pause the reconciliation negotiations into 2022 and beyond, but if reconciliation is to be used to lift the debt ceiling, thats not an option.
Heres hoping that Manchins obstruction on the filibuster, which then forces reconciliation to be used to lift the debt ceiling, will be the catalyst that forces Manchin and Sinema to begin good faith negotiations in crafting a reconciliation bill that will pass the senate before Yellens hard deadline of October 18 (it would really need to pass several days before Oct 18, to allow the house to pass and get the bill to Bidens desk- any significant delay past Oct 1 will likely churn the markets).
FBaggins
(26,727 posts)There are only democrats who strongly prefer to not do that - because it has the effect of making the reconciliation bill look dishonest.
On edit - filed under "strongly prefer" - Schumer is now saying that they "cannot and will not" use reconciliation. But gives no real reason why we "cannot". No telling whether he can make that stick effectively.
keithbvadu2
(36,722 posts)Yo_Mama_Been_Loggin
(107,837 posts)Bengus81
(6,930 posts)2017,2018,2019 and that the ceiling has been raised nearly twice as many times by Republican admins that Dems since the 60's.
But hell...his memory doesn't even go back to Jan 6th.
"Under President Donald Trump, Congress passed three spending bills in 2017, 2018 and 2019 that suspended the debt limit. In each case, the debt limit was then raised at the end of the suspension period to account for the cumulative borrowing that occurred during the suspension, as explained in an April report by the nonpartisan Congressional Research Service"
BumRushDaShow
(128,702 posts)and the media refuses to not only point this out, but to pound it out over and over.
That is why we say they fuel "the divide", where their false equivalencies only apply to one side.