17 Nov 2021
Janet Yellen: Federal Govt Could be Out of Cash by 15th Dec
The Index Today
On Thursday, Treasury Secretary Janet Yellen raised concerns over depleting financial resources and raising the federal borrowing limit. The government could face serious financial issues as early as 15th of December if the current standoff on borrowing isn’t resolved.
Janet Yellen gave an estimate of when the government will use up all resources and will be unable to pay bills. In a letter to the congress, she wrote, “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.”
With the signing of the new infrastructure bill worth $1 trillion, the treasury could be strapped of cash as it will directing cash towards the Highway Trust Fund. The letter does not provide a concrete date but could fall somewhere between mid of December to February. She further wrote in the letter, “While I have a high degree of confidence that Treasury will be able to finance the U.S government through December 15 and complete the Highway Trust Fund investment, there are scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the U.S government beyond this date.”
The By raising the debt limit, the government will be able to issue new debt to pay for social security benefits and more. In the case the ceiling is not approved for a raise, the government may have to suspend certain payments of benefits and obligations. This is turn would affect families, employees and individuals who rely on the government for sustenance.