We go thru this just about EVERY YEAR….
Because the government spends MORE money then it takes in?
Congress must authorize how much the country can borrow OVER what it spends or, the ‘Debt Ceiling’
Nobody wants the government to say it can’t pay its bills….
The Treasury Department will probably run out of money to pay the nation’s bills by the end of September unless Congress takes action, the Congressional Budget Office said Tuesday, raising a scenario that could cause financial havoc and shake the foundations of the global economy.
The U.S. government has been spending more money than it brings in for years, forcing the Treasury to borrow money by issuing bonds. But Treasury is allowed to issue only so much debt before it bumps up against the “debt ceiling,” a borrowing limit set by Congress.
Congress had previously agreed to suspend that limit until March 2. But when the limit comes back into effect, Treasury will not technically have the authority to borrow additional funds. This scenario has happened numerous times in recent years, and both Republican and Democratic administrations have resorted to what have been dubbed “extraordinary measures” to be able to keep paying the government’s bills — at times for several months after the debt ceiling is reached. But those efforts can keep the bills paid for only so long.
“The length of time that extraordinary measures can last is subject to considerable uncertainty,” Jonathan Blum, a deputy assistant treasury secretary, wrote in a recent letter to Rep. Richard E. Neal (D-Mass.). “Given this uncertainty, Treasury respectfully urges Congress to act as soon as possible to suspend or increase the statutory debt limit and protect the full faith and credit of the United States.”
The Trump administration has not given a specific date when it believes Treasury will run out of money, but the bipartisan CBO report is a widely respected estimate of when real trouble might occur.
“The Treasury will probably run out of cash near the end of this fiscal year or early in the next one,” CBO wrote. The federal government’s fiscal year ends Sept. 30…..