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Wed Sep 8, 2021, 02:25 PM

Yellen: U.S. on track to default on national debt in October

Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit.

In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.

"Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history," Yellen said.

At: https://thehill.com/policy/finance/571237-yellen-us-on-track-to-default-on-national-debt-in-october



Treasury Secretary Janet Yellen testifying in the Senate in June.

Yellen warned that failing to raise the debt ceiling - which was restored on August 1 - in a timely way, could by October result in the nation's first federal debt default in history.

Congressional Republicans are largely opposed to raising the ceiling on the $28 trillion federal debt - setting the stage for a showdown similar to the 2011 debt ceiling crisis.

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Response to peppertree (Original post)

Wed Sep 8, 2021, 02:37 PM

1. Not good. I doubt it will happen.

It’s raised everytime with some complainers. But it will raise.

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Response to jimfields33 (Reply #1)

Wed Sep 8, 2021, 04:09 PM

4. I agree. I'm sure the Fed will find a way around whatever McCarthy's Repugs pull.

Trying to ruin international faith in the dollar has become the GOP's go-to sabotage lever - a prospect even more dangerous than the worst terrorist attack anyone can imagine.

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Response to peppertree (Original post)

Wed Sep 8, 2021, 02:48 PM

2. as happens just about every year for like about the last 25 years.

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Response to Voltaire2 (Reply #2)

Wed Sep 8, 2021, 03:50 PM

3. Yes - but today's Repugs have become a full-on fifth column

To say nothing of some of their biggest backers - notably vulture funder Paul Singer.

Best known for bankrupting Argentina by having (bribing?) a judge block payments to bondholders, Singer was reportedly huddling with then-Majority Leader Eric Cantor during the last debt ceiling showdown in 2011.

Cantor was said to be the main instigator in that one.

That said, I'm sure the Fed will find a way around whatever Repugs do this time.

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Response to peppertree (Original post)

Wed Sep 8, 2021, 04:52 PM

5. Does raising the debt ceiling take a 2/3 vote? n/t

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Response to getagrip_already (Reply #5)

Wed Sep 8, 2021, 06:59 PM

6. No (thank goodness) - and under the Gephardt Rule, mere passage of the budget suffices in the House

The Gephardt Rule, as you know, has been back since Dems regained the gavel (Repug speakers always repeal it, first thing).

That said - the problem, as usual, is the Senate:

If the 2022 budget isn't passed via reconciliation, a separate Senate vote would be required for passage of the debt ceiling increase - even if already passed in the House.

And if Manchild and Sinnerma insist in carrying water for Republicans - nearly all of whom want a default - then we've got a problem.

My understanding, though, is that the Fed has ways around default though their numerous account ledgers. Robbing Peter to pay Paul as it were.

Hey - whatever works.

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