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World NewsU.S. could hit borrowing limit on Dec. 15, Yellen says

U.S. could hit borrowing limit on Dec. 15, Yellen says

Janet Yellen, U.S. Treasury secretary, speaks throughout an interview on the National Association of Business Economics (NABE) annual assembly in Arlington, Virginia, U.S., on Tuesday, Sept. 28, 2021.

Amanda Andrade-Rhoades | Bloomberg | Getty Images

Treasury Secretary Janet Yellen on Tuesday instructed lawmakers that she now estimates that the U.S. will attain its debt limit on Dec. 15, nearly two weeks later than her preliminary forecast of Dec. 3.

Those extra 12 days would provide Congress extra time to strike a deal on how one can elevate or droop the debt ceiling. If lawmakers fail to take action earlier than the so-called drop-dead date, the U.S. authorities would default for the primary time ever.

In a letter to House Speaker Nancy Pelosi, D-Calif., Yellen defined that her revised estimate is partly the results of President Joe Biden’s enactment of the $1 trillion infrastructure plan earlier this week.

“Yesterday, the President signed the Infrastructure Investment and Jobs Act, which appropriates $118 billion for the Highway Trust Fund,” she wrote. “These funds must be transferred¬† into the Highway Trust Fund within one month after the enactment of the legislation, and the transfer will be completed on December 15.”

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“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,” she added.

Yellen has stated she expects a default would result in a recession and jeopardize the U.S. greenback’s function because the globe’s reserve forex.

Congress handed a stopgap debt ceiling improve in early October. It’s doubtless Democrats, who’ve razor-thin majorities in each homes of Congress, should go the subsequent improve alongside occasion traces.

The debt ceiling is simply a part of the Democrats’ monumental to-do record earlier than the top of the yr.

The House is anticipated to vote on Biden’s practically $1.8 trillion social security internet and local weather plan this week, earlier than Congress heads to Thanksgiving recess. Senate Majority Leader Chuck Schumer stated on Tuesday that his chamber goals to go the measure, generally known as the Build Back Better Act, earlier than Christmas.

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