Teh One Who Knocks
08-26-2013, 09:38 PM
By Jeanne Sahadi - CNNMoney
The United States will reach the limit of its borrowing authority in mid-October, Treasury Secretary Jack Lew said Monday.
At that point, Lew warned, unless Congress has raised the debt ceiling, the Treasury Department will only be able to pay the country's incoming bills with the cash it has on hand.
That's a dicey proposition. Treasury forecasts that by mid-October it will have a cash balance of only $50 billion, an amount insufficient to pay what the country owes for "an extended period of time ... and on certain days net expenditures could exceed such a cash balance," Lew wrote in a letter to Congress.
"It is not possible for us to estimate with any precision the date on which Treasury would exhaust its cash in this situation," he added, noting a host of factors that can influence the outcome, including the unpredictability of tax receipts.
Until now, Lew would say only that the debt ceiling would have to be raised "sometime" after Labor Day.
The debt ceiling now stands at $16.699 trillion.
That level was reached in mid-May. At that time, Treasury began a host of "extraordinary measures" to continue paying all the country's bills in full and on time. For instance, Treasury first temporarily stopped issuing special securities to state and local governments.
But by mid-October, those extraordinary measures will be tapped out.
"Under any circumstances -- in light of its schedule, the inherent variability of cash flows and the dire consequences of miscalculation -- Congress must act before the middle of October," Lew said. To top of page
The United States will reach the limit of its borrowing authority in mid-October, Treasury Secretary Jack Lew said Monday.
At that point, Lew warned, unless Congress has raised the debt ceiling, the Treasury Department will only be able to pay the country's incoming bills with the cash it has on hand.
That's a dicey proposition. Treasury forecasts that by mid-October it will have a cash balance of only $50 billion, an amount insufficient to pay what the country owes for "an extended period of time ... and on certain days net expenditures could exceed such a cash balance," Lew wrote in a letter to Congress.
"It is not possible for us to estimate with any precision the date on which Treasury would exhaust its cash in this situation," he added, noting a host of factors that can influence the outcome, including the unpredictability of tax receipts.
Until now, Lew would say only that the debt ceiling would have to be raised "sometime" after Labor Day.
The debt ceiling now stands at $16.699 trillion.
That level was reached in mid-May. At that time, Treasury began a host of "extraordinary measures" to continue paying all the country's bills in full and on time. For instance, Treasury first temporarily stopped issuing special securities to state and local governments.
But by mid-October, those extraordinary measures will be tapped out.
"Under any circumstances -- in light of its schedule, the inherent variability of cash flows and the dire consequences of miscalculation -- Congress must act before the middle of October," Lew said. To top of page