WASHINGTON (AP) – Treasury Secretary Janet Yellen is telling Congress that the Treasury Department will end all of its “extraordinary measures” to avoid an unprecedented lapse on government obligations by October 18.
Yellen warned Congress three weeks ago that the Treasury would be out of maneuvering room by mid-October. In a letter on Tuesday, she said economists were able to issue a specific date based on the amount of revenue the US received in September from corporate and private quarterly tax payments.
Yellen’s letter arrived a day after the Senate Republican It blocked consideration of a bill to tackle debt limits and on Friday approved a stopgap funding bill to prevent a government shutdown. Hopefully Democrats Will remove the increase in the debt limit and try to pass the stop-gap spending bill only to avoid the government shutdown.
In his letter, Yellen said, “We now expect the Treasury to end its extraordinary measures if Congress does not act to raise or suspend the debt limit by October 18. At that point, we would expect the Treasury to end its extraordinary measures.” that the Treasury will be left with very limited resources that will quickly run out.”
Yellen said it was uncertain whether the Treasury would be able to meet all of the country’s commitments after that date.
As he has done in the past, Yellen urged Congress to “protect the full confidence and credit of the United States by acting as quickly as possible” to either raise the debt limit or suspend it.
While the nation has never defaulted on its loans, Yellen said it would not be wise to wait until the last minute to take action. In a budget standoff between Republicans and the Obama administration in 2011, the credit rating agency Standard & Poor’s downgraded a portion of the Treasury’s sterling AAA credit rating for the first time in history, citing the uncertainty caused by the standoff.
“We know from past credit limit impasse that waiting until the last minute can seriously damage business and consumer confidence, increase borrowing costs for taxpayers and negatively impact United States credit ratings for years to come. Could have an impact,” Yellen said.
“Failure to act promptly could result in substantial disruption to financial markets, as increased uncertainty could increase volatility and erode investor confidence,” Yellen said in his letter to congressional leaders.