With the two-year suspension to alter the debt limit coming to an end on July 31, Bloomberg quotes US Congressional Budget Office (CBO) as saying, “US lawmakers likely have until October or November to raise or suspend the debt limit.”
The same ease pressure from the Biden Administration and the Senate which currency struggles over the infrastructure spending plans.
The CBO report, published Wednesday, also said, “Without an increase, the Treasury Department’s ability to borrow would be exhausted and it would probably run out of cash sometime in the first quarter of the fiscal year starting Oct. 1.”
It’s worth noting that US Treasury Secretary Janet Yellen previously indicated, “The department’s tools could be exhausted as soon as this summer, while banks were broadly expecting a deal to avert a crisis as early as the end of September, with an outside risk of a technical default in November,” per Bloomberg.
Additional quotes (From Bloomberg)
The $450 billion cash balance the Treasury projects for the end of July, combined with the department’s so-called extraordinary measures, should allow the government to avoid a default until sometime during the fiscal first quarter.
The limit, which was the last set at $22 trillion in 2019, will adjust to the current level when the suspension ends. It was $28.5 trillion on June 30.
With the new deadline fast approaching, unless Congress agrees to raise or suspend the ceiling again, the Treasury would have to begin special measures to cover expenses.
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