The government will exhaust its emergency borrowing authority sometime between March and June 2014, if Congress does not suspend or increase the nation’s debt limit again, according to a new report.
The nonpartisan Congressional Budget Office estimated that Treasury’s wiggle room to avoid breaching the debt ceiling could run out as early as March because the government typically runs a large deficit during that month and in February due to tax refunds. Still, April brings in significant tax revenue for the government so that could buy it more time on the debt ceiling, CBO reasoned. “Given the volume of the government’s daily cash flows and the uncertainty about the magnitude of key transactions during those months, the Treasury could exhaust its extraordinary measures and authority to borrow as early as March or as late as May or June,” the report said.
Continue reading “Budget Office: Next Debt Ceiling D-Day Could Come in March”
Treasury Secretary Jacob Lew leaves the Capitol after a visit on Thursday.
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The Treasury Department is issuing a warning of dire economic consequences that could rival the Great Recession if Congress is unable to agree on raising the debt ceiling and the nation defaults on its obligations.
Treasury’s report, “The Potential Macroeconomic Effect of Debt Ceiling Brinkmanship,” comes as Congress is still wrangling over a short-term spending bill to reverse the partial government shutdown that went into effect Tuesday. Later this month, House Republicans and Senate Democrats will need to agree to raise the $16.7 trillion debt ceiling or face a possible default. Continue reading “Treasury: New Debt Ceiling Fight Could Derail Economy”
In football, a “triple threat” refers to a player skilled at running, passing and kicking. Federal employees are facing a triple threat of their own: from the government hitting its debt ceiling, from pending “sequestration” automatic cuts in budgets, and from a potential lapse in agency spending authority. The three relate in some ways but are separate in others.
Following are 10 questions and answers on those issues:
Q. What’s at stake for federal employees if the debt limit is exceeded?
A. The government actually has hit the ceiling already. The Treasury Department, however, has been using various financial maneuvers to free up operating money, which it projects can prevent a default for only several more weeks. Continue reading “10 questions and answers on budgetary threats to federal employees”