As Congress gears up for another fight over the debt ceiling, the so-called "X date," when the United States is no longer able to meet its debt obligations on time, will most likely fall between December 21, 2021 and January 28, 2022, the Bipartisan Policy Center projects. This new projection is a narrower window than the group's previous assessment of when the risk will dramatically escalate, which was mid-December to early February. Treasury Secretary Janet Yellen told the Senate Banking Committee earlier this week she's confident the U.S. will be able to meet its obligations through December 15, but there are scenarios in which the government might not be able to pay its bills after that date if lawmakers do not raise the debt ceiling. She warned that a failure to raise the debt limit would "eviscerate" the economic recovery. The Bipartisan Policy Center's timeline factors in the $118 billion transfer to the Highway Trust Fund that the Treasury Department confirmed will be completed by December 15. Quarterly corporate tax receipts are due that day. If they come in weak, it could leave the Treasury Department with a dangerously low cash balance, the organization warned. "Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed," said Shai Akabas, director of economic policy for the center. "Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit." Adding to the uncertainty is the unpredictability of U.S. government cash flows during the COVID-19 pandemic, revenues have been unusually volatile and spending on certain pandemic-related programs have been uneven. Failing to pay the country's bills on time could have a ripple effect across the economy, particularly during a time of economic recovery and mounting questions over a new COVID-19 variant, the Bipartisan Policy Center said. Even the uncertainty over the U.S. meeting its obligations has costs. The U.S. could face have its credit rating downgraded as it did in 2011. Interest rates on some short-term Treasury securities have already risen. "It never ceases to amaze that the largest econom . . . read the full article here.
Keywords: senate, approaches, bipartisan, center, policy, debt, bills, unable, treasury, weeks, limit, pay, resolution, congress, obligations
LAW: the Responsible Budgeting Act
DATE: 2011, days, one day, 10 years, December, that day, Quarterly, December 15, fiscal year, mid-December, early February, January 28, 2022, every few months, earlier this week, the following fiscal year, between December 21, 2021 and
MONEY: $118 billion
PERCENT: at least 5%