So, we’re going to run out of money soon. Oh yeah, on top of the drama regarding the infrastructure bill and the reconciliation mess, both carrying a combined price tag of around four trillion dollars, we blew the deadline the raise the debt ceiling. The Treasury Department has now entered an emergency situation, diving into their emergency funds to meet the government’s commitments, but it will run out in two-to-three months (via CNBC):
The Treasury Department will begin conducting emergency cash-conservation steps on Monday to avoid busting the federal borrowing limit after a two-year suspension of the debt ceiling expired at the end of July.
Economists say those so-called extraordinary measures will allow Treasury to pay off the government’s bills without floating new debt for two to three months. After that, Congress will need to either raise or suspend the borrowing limit or risk the U.S. defaulting on its obligations.
The limit, a facet of American politics for over a century, prevents the Treasury from issuing new bonds to fund government activities once a certain debt level is reached. That level reached $22 trillion in August 2019 and was suspended until Saturday.
The new debt limit will include Washington’s additional borrowing since summer 2019. The Congressional Budget Office estimated in July that the new cap will likely come in just north of $28.5 trillion.
The Treasury Department notified Congress on Monday afternoon to confirm that it’s begun the emergency measures.
We’ve mentioned this before, but this is the leverage Democrats need to get both massive government spending packages through. Sen. Kyrsten Sinema (D-AZ) is a wild card. She says she’s not suspending her August vacation plans if there’s drama over the votes for these bills. It’s already a circus. The hard-core leftists in the House already said they will block the $1 trillion infrastructure bill if the $3.5 trillion reconciliation package isn’t passed first. Sinema is needed to pass the latter and the GOP is not going to go along with this plan at all—at least they shouldn’t. Congress in on recess, so just shows how serious our political class is taking this situation. They’re going to vote, it will probably fail, and then they’ll just revisit this when the funding for the government is about to expire on September 30. Then, roll EVERYTHING in a must-pass package. And people wonder why DC is hated so much.
Author : Matt Vespa