Thursday, May 25, 2017

US Government Could Run Out of Money This Summer

Things could get very tricky for the Trump administration bu mid-summer.

Trump officials, testifying on Capitol Hill Wednesday on their 10-year budget plans, pointed to a more pressing fiscal problem: They could run out of room to pay the government’s bills within the next few months, reports The Wall Street Journal.

Government debt, at nearly $20 trillion, hit Congress’s self-imposed limit in mid-March. Since then, the Treasury Department has been employing cash-conservation measures to keep funding itself, steps it has taken routinely in recent years after repeated breaches of the ceiling. But those measures, which include redeeming some investments in federal pension programs, are temporary and can typically only keep funding the government for a few months.

Notes the Journal: Analysts expected the measures would allow Treasury to keep paying its bills until the fall, but Mnuchin suggested lawmakers should act before the end of July.

Earlier Wednesday, White House budget director Mick Mulvaney said the date by which Congress would need to raise the debt limit may come sooner than the administration had anticipated. “My understanding is that the receipts currently are coming in a little bit slower than expected,” he told a House panel.

Congress is scheduled to recess Washington around July 28 and won't return until after Labor Day.

According to the Journal, before Wednesday, the Bipartisan Policy Center projected Treasury could keep financing government operations until October or November, and pointed to Oct. 2 as a challenging date with a bundle of payments the government must make. But if funds are coming in slower than anticipated the July 28 deadline becomes very important and might prove a major obstacle given the various Congressional groups with different agendas. Stay tuned.


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