The Treasury Department might not have a clear picture of when it will run out of cash to pay the federal government’s bills until “sometime after” the current tax filing season.
The White House and Senate Democrats have been at odds with the GOP-controlled House of Representatives over how to proceed with raising the U.S. debt limit, which is the total amount of money the government is allowed borrow to keep paying its obligations at home and abroad. Republicans will move on the limit if President Joe Biden agrees to deep spending cuts – but he’s refused to pair the two issues and says the national debt is an obligation rather than a negotiation point.
In a letter to House Budget Committee member Rep. Bob Good, R-Va., in response to his inquiry on how the government intends to avoid economic turmoil, a Treasury official reiterated warnings about the “catastrophic impacts” of a U.S. government debt default, but added that it’s unclear when it will need new borrowing authority.
“Given historical variations and the timing of tax filings being made over the next two months, we may not have a clearer picture until sometime after the filing season regarding how long extraordinary measures and cash on hand will continue to enable Treasury to satisfy the government’s obligations,” Treasury told Good.
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Good told Fox News Digital that the Treasury’s letter “abandons the June 5th date she previously issued for the exhaustion of ‘extraordinary measures’ and claims it is difficult to determine when that date will come.”
“Does this mean Secretary Yellen can no longer estimate what the deadline is or is she simply engaging in high stakes default politics?” he questioned.
“Contrary to what the media and Democrats would have you believe, this is not just about paying the bills we owe. In fact, Democrats refuse to put forward a plan to pay down our debt by even one penny even with their proposed economy-crushing tax increases. No, this is about getting a blank check to get past the next election in 2024,” Good added.
When the U.S. bumped up against its $31.4 trillion debt ceiling earlier this year, Treasury Secretary Janet Yellen warned that her department was resorting to “extraordinary measures” to keep paying the government’s bills. At the time, officials anticipated those measures – which mostly involve delaying payments to various federal worker retirement plans – would be exhausted by early June, after new more borrowing would be needed to fund other obligations.
But in the letter to Good sent on March 9 and obtained by Fox News Digital on Monday evening, Treasury Assistant Secretary for Legislative Affairs Jonathan Davidson strayed from providing any kind of window on when that so-called ‘x-date’ would be.
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“As with other debt limit impasses, the period of time that extraordinary measures may last is subject to inherent uncertainty, because the federal government’s cash flows can vary significantly based on numerous hard-to-predict factors,” the letter read.
It also reiterated past warnings about the need to raise the debt ceiling. “Failure to raise the debt limit in a timely manner would result in the federal government being unable to meet all of these obligations and would have potentially catastrophic impacts on financial markets and the economy, as well as the businesses and millions of individuals, including Social Security recipients and members of the military, who rely on the government to make all of its payments on time,” he wrote.
Good had written to Yellen earlier this month asking for information on what, if any, contingency plan her department had to prevent the U.S. from defaulting “irrespective of a breach of the statutory debt limit.”
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The Treasury’s response does not appear to answer that question directly – but it included a veiled jab against House Republicans’ proposal to prioritize items within the national debt, preserving public debt and Social Security payments while ranking most other obligations into separate tiers.
“Making some payments but not others is simply default by another name. Treasury’s systems are designed to make all required payments – not to pick and choose which payments to make,” the letter stated.