US government could run out of cash over the summer
The White House is calling on Congress to urgently raise the debt ceiling before summer recess, or risk the nation running out of money before it returns.
In a letter to the Democrat speaker of the House of Representatives, Nancy Pelosi, Treasury secretary Steven Mnuchin wrote that “while it is impossible to identify precisely” how long funds will last, “based on updated projections, there is a scenario in which we run out of cash in early September, before Congress reconvenes”.
The letter, sent on Friday, concludes, “as such, I request that Congress increase the debt ceiling before Congress leaves for summer recess”.
In May, the Trump administration projected US borrowing authority would last until October or November. However, the latest forecast by Washington-based think tank the Bipartisan Policy Center has thrown that into doubt. If the credit limit is reached in early September, before Congress reconvenes, the government could default on its $22 trillion national debt, sending shock-waves through global financial markets.
Close to reaching a deal?
The Wall Street Journal reported that Pelosi and Mnuchin held numerous phone conversations at the end of last week and into the weekend, and that Mnuchin said on Monday morning that the administration was now “very close” to reaching a deal with congressional leaders before they break for summer on 26 July.
But by Monday evening, Pelosi dismissed the idea of a short-term debt ceiling hike, saying this would not happen without a budget agreement.
There has been a stand-off in budget talks between Democrats and Republicans as they argue over military spending increases, domestic spending limits and the Mexico border wall. This wrangling has left a two-year-spending deal and the federal borrowing limit up in the air, with little sign of a resolution.
Rising national debt
National debt has increased by $3 trillion since President Trump took office. Trump’s sanctioning of $1.5 trillion of tax cuts in 2017, combined with increased public spending, is thought to be behind the rise.
The federal government deficit has also mushroomed. Last week the Treasury revealed that the federal government deficit has grown 23.1% in the first nine months of the fiscal year compared with the same period a year ago, taking it to a total of $747.1bn.
About Natalie Leal
Natalie is a freelance journalist whose work has been published by The Sun Online, The Guardian, Novara Media, Positive News, and Welfare Weekly, among others. She also writes reports and case studies on global business trends for behavioural insights agency, Canvas8. Prior to working as a journalist Natalie worked for the public sector in social services for several years. She switched careers in 2013 after winning a fully funded NCTJ in a national writing competition. She holds a Masters degree in social anthropology from Sussex University where she specialised in processes of social change and international conflict and reconciliation processes.
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Y’all not serious about this budget. It’s no way that the Federal Gov’t should be be spending this kind of cash flow. Take back the tax cash flow until the budget is back under control…whatever Ms. Speaker supports might be reasonable…