US Congress faces next crisis

Treasury Secretary Steven Mnuchin has warned Congress repeatedly that the government will run out of money on September 29, without an increase in borrowing authority.

US Congress faces next crisis

World Bulletin / News Desk

Washington once again is facing the precipice that is the federal debt limit that Congress must raise to prevent the government from defaulting on its financial obligations for the first time in history.

Treasury will need to resume borrowing to cover the government's expenses, including payments to elderly retirees, federal workers and welfare recipients, as well as bondholders worldwide.

Without an increase in the debt ceiling, the government will default, likely touching off massive turmoil in financial markets.

The United States already hit its current $19.8 trillion borrowing limit in March, and since then the Treasury has used a series of "extraordinary measures" like holding off on some investments to keep the government below the limit.

Because the federal government traditionally runs a budget deficit, it has no choice but to borrow to pay interest on its existing debts as well as fund payrolls, retirement benefits, social spending and other expenses already approved by Congress.

Even though the White House and both chambers of Congress are in Republican hands, getting a green light to increase the debt ceiling is far from a done deal.

Some conservatives have built careers crusading against budget deficits and insist that spending cuts be tied to any increase in borrowing.



Güncelleme Tarihi: 02 Ağustos 2017, 23:50