CBO says: The Roof is About to be On Fire!
Everybody loves a party with an endless stream of chips and drinks! Well, guess what? The party is about to be over if Congress doesn’t raise the debt ceiling before they take a few moments to relax on August.
Recently, the Congressional Budget Office, an entity that conducts independent analyses about budgetary and economic issues to aid Congressional budgeting procedures, has released a publication that says something like: “Dad, we need a bigger allowance!”
In their Federal Debt and the Statutory Limit report of June 2017, the CBO stated that “without an increase in the debt limit, the Treasury, by using all available extraordinary measures, would most likely be able to continue borrowing and have sufficient cash to make its usual payments until early to mid-October of this year”.
Now, you might be asking, how did we get to that? Great question! Let’s have a look at the events that led the Treasury to be in such position.
The Government Shutdown of 1995 and the 2011 and 2013 debt ceiling crises were the prequel of the latest November 2, 2015’s debt suspension, approved by Congress to refuse any modifications to the debt ceiling without an agreement on budget deficit reductions.
These measures had put the Treasury into a difficult position since the Department has to figure out how to pay for things by any other means necessary. These so called “extraordinary measures”, are about to be exhausted, according to the CBO, and October is the forecasted deadline for Congress to agree on, well, something!
Nobody wants another Government Shutdown for sure, or do they? That’s probably a subject for another article.
The fact is that the situation has changed from a previous assessment made by the CBO in March 2017, where the exhaustion of such measures was expected to happen at some point in the fall season, giving Congress a wider period of time to decide on the matter.
The reason why the forecasted date was narrowed is that their budget deficit projections changed (for the worst!), estimating $134 billion of additional expenditures that were not included in March’s report.
This probably doesn’t come as a shock for Congress members, but it does moves the subject into the spotlight once again, creating discomfort among the public, who is currently asking, why did we allow this to get this far?
The answer, as in many other occasions, is politics. A handful of republicans argue that they are not comfortable with raising the ceiling without adding a large list of budget costs and some democrats don’t agree with the fact that tax cuts for the rich are still being regarded as a good thing.
So, there’s your answer! That being said, the Treasury has said that it will continue to use extraordinary measures to deal with all upcoming payments, including new issues to compensate maturing ones, other new securities issued through the Federal Financing Bank, along with a suspension in investments made through the Exchange Stabilization Fund and a suspension in the issuance of new State and Local Government series.
The Treasury Secretary Steve Mnuchin is currently encouraging Congress to take action before their August recess takes place, which should be an obvious course of action, due to the fact that shutting down a Government is a pressing matter, isn’t it?
We’ll have to wait and see if there’s movement in the Capitol before vacations!
Good thing that at FastUnsecured.com we don’t need that kind of bureaucracy to get you the funds you need! We are all about speeding things up! Take a look at our website to get some support on your current credit requirements, 60-minute approval and funding in 72 hours. Way better than Congress, right?