The United States is on track to default on the national debt as early as October due tof the White House and Congress inability to raise the debt limit, Treasury Secretary Janet Yellen warned on Wednesday, reiterating that emergency measures put in place to raise cash could be exhausted soon, Politico reports.
Yellen wrote in her letter to House Speaker Nancy Pelosi that Biden administration’s best and most recent calculations suggest the US will run out of cash in October, blaming the inability to provide a specific estimate on the uncertainty that could alone hurt financial markets.
In her August announcement, she noted that in its efforts to free up funds to service the national debt, the Treasury Department is suspending fully or partly investments in the Postal Service Retiree Health Benefits Fund, among other funds.
She said that other US treasury secretaries have also suspended flexible investments as well.
Last minute suspending or increasing the debt limit has proved harmful in the past debt limit impasses causing serious harm to business, US credit rating and consumer confidence and raising short-term borrowing costs for taxpayers.
After the negotiations on the debt ceiling between Democrat lawmakers and Republican rivals have dragged on for months with no solution in sight, Pelosi reiterated Wednesday that Democrats will try to waive the debt limit with bipartisan vote to instead of opting for the reconciliation process.