https://sputnikglobe.com/20230523/us-treasury-reportedly-asks-if-federal-agencies-can-delay-payments-to-avert-debt-default-1110546437.html
The US Treasury is reportedly asking whether federal agencies can delay payments to prevent a debt default
The US Treasury is reportedly asking whether federal agencies can delay payments to prevent a debt default
As the national debt default creeps closer, the Treasury is rushing to push back that date thanks to gridlock in Congress. That includes asking federal agencies if they can delay payments, according to reports Tuesday.
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According to the report, the Treasury sent letters to federal agencies last week instructing them to ensure the Treasury is closely informed of their spending, including giving the agency at least two days’ notice of all payments between $50 million and $500 million, and five. Daily notice for payments over $500 million. In addition, Treasury officials have also asked those agencies how flexible they can be with their payments without delaying their payment deadlines, which could lead to default. Emergency measures Treasury is trying to find new ways. prevent a default on the US national debt since Congress refused to raise the debt ceiling in January. It has adopted a series of “emergency measures”, including delaying payments and spending monthly tax receipts immediately, to keep the government afloat in the absence of new spending allocations. Some other measures that have not yet been adopted include sale or “raid”. Bonds held by federal government trust funds, such as the Social Security Trust Fund or the Highway Trust Fund. While this would quickly raise tens of billions of dollars, it would cost the government more money in the long run because of repayment penalties. A less serious but technically possible option is for the Treasury to simply mint $1 trillion worth of coins, a solution that Yellen has flatly rejected. A default would likely lead to a downgrade of the government’s credit rating and trigger an economic crisis. , the Republican-controlled House of Representatives and the Democratic-controlled Senate and the White House have so far been unable to agree on raising the debt ceiling. Republicans, who are ideologically opposed to spending on social programs and who have a new majority in the House of Representatives, have tried to use the threat of default to force budget concessions from Democrats, including cuts to their most hated programs, such as Supplemental Security Bill. Food Assistance Program (SNAP), better known as food stamps. On Tuesday, House Speaker Kevin McCarthy (R-CA) told his GOP colleagues that “we still don’t have an agreement.” “I need you all to contact me about the debt limit,” he said.
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treasury; debt ceiling; payments; delay
treasury; debt ceiling; payments; delay
As the default on the US sovereign debt gets closer, thanks to the impasse in Congress, the US Treasury is rushing to push that date back as much as possible. That includes asking federal agencies if they can delay payments, according to U.S. media reports Tuesday, citing “people familiar with the matter.”
According to the report, the Treasury sent letters to federal agencies last week instructing them to ensure the Treasury is closely informed of their spending, including giving the agency at least two days’ notice of all payments between $50 million and $500 million, and five. Daily notification for payments over $500 million.
“Please emphasize to your staff the importance of these updates during this time and to ensure that your agency reports are accurate,” the memo said. “Your reporting offices must match reported amounts with actual billing activity to ensure the reliability of these reports during critical periods.”
In addition, Treasury officials have also asked those agencies how flexible their payments can be without delaying their payment deadlines, which could lead to default.
Emergency measures
The Treasury has been struggling to find new ways to prevent a default on the US sovereign debt since Congress refused to raise the debt ceiling in January. It has adopted a series of “emergency measures”, including delaying payments and immediately spending monthly tax receipts as they come in, to keep the government afloat in the absence of new spending allocations.
Treasury Secretary Janet Yellen warned in January that the effort could only buy so much time, and earlier this month she set a tough June 1 deadline for Congress to overcome an ideological roadblock blocking passage of a new debt ceiling hike.
After that, it’s unclear exactly when the government’s coffers will be depleted, with some optimistic estimates saying it could last until July if tax revenues default by June.
Some other measures that have not yet been adopted include the sale or “raiding” of bonds held by federal government trust funds such as the Social Security Trust Fund or the Highway Trust Fund. While this would quickly raise tens of billions of dollars, it would cost the government more money in the long run because of repayment penalties.
A less serious but technically feasible option is for the Treasury to simply mint $1 trillion worth of coins, a solution that Yellen has illegally rejected.
A default would likely lead to a downgrade of the government’s credit rating and an economic crisis.
A political jockey
Despite the threat, the Republican-controlled House of Representatives and the Democratic-controlled Senate and the White House have so far been unable to agree on raising the debt ceiling.
Republicans, who are ideologically opposed to spending on social programs and who have a new majority in the House of Representatives, have tried to use the threat of default to force budget concessions from Democrats, including cuts to their most hated programs, such as Supplemental Security Bill. Nutrition Assistance Program (SNAP), better known as food stamps.
The White House has continued to refuse to negotiate, demanding a “clean” debt ceiling bill without mandate cuts or spending limits, as was done until the early 21st century.
House Speaker Kevin McCarthy (R-CA) told his GOP colleagues on Tuesday that “we are nowhere near a deal.”
“I need you all to contact me on the debt limit,” he said.