Tags: Trump Administration | NORTHAM | POL | US | WORLD

US May Top Debt Limit Sooner Than Forecast, Forcing Congress' Hand

steve mnuchin stands under the national debt clock.
Treasury Secretary Steven Mnuchin testifies on Capitol Hill July 12, 2018. Since March 2, the U.S. has reached its $22 trillion limit on borrowing. ( Chip Somodevilla/Getty Images)

Monday, 08 July 2019 04:41 PM

The Bipartisan Policy Center, an independent think tank, said Monday there is a “significant risk” that the U.S. will breach its debt limit in September unless Congress acts.

The group is revising its previous projection of an October to November date at which the U.S. will default on payment obligations in the face of declining corporate tax revenue projections this fiscal year.

The Treasury Department has been using so-called extraordinary measures to meet its debt obligations since March 2, when the U.S. reached its $22 trillion limit on borrowing.

It is still more likely that a default would occur in October, according to the BPC, but there is now a heightened risk in the first weeks of September because corporate tax revenues are already down 9% this year.

Dislocations in Treasury bill pricing suggest the market is struggling to pinpoint exactly when traders ought to be concerned about when the government runs out of borrowing capacity. While much focus had been on securities maturing in early October, current pricing indicates avoidance of various different bills across the September to October period.

Shai Akabas, BPC’s director of economic policy, told reporters that Congress should not leave Washington at the end of the month for a six-week recess without raising the debt ceiling.

“That is placing a reckless risk on the U.S.’s full faith and credit,” he said.

House Democrats have called for the debt ceiling to be raised in conjunction with a two-year deal on government spending that has so far eluded congressional negotiators.

© Copyright 2021 Bloomberg News. All rights reserved.


StreetTalk
The Bipartisan Policy Center, an independent think tank, said Monday there is a "significant risk" that the U.S. will breach its debt limit in September unless Congress acts.The group is revising its previous projection of an October to November date at which the U.S. will...
NORTHAM, POL, US, WORLD
253
2019-41-08
Monday, 08 July 2019 04:41 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved