The United States may default on government obligations from December 21 to January 28 if Congress does not raise the threshold for national debt, the Center for Bipartisan Politics said in a statement.
Center analysts revised downward their two-week forecast, according to which the default was expected from mid-December to mid-February. They predict that “X-day” is likely to come before the New Year: by December 15, the Ministry of Finance must allocate $ 115 billion to the federal Road Trust Fund, on the same day the deadline for payment of corporate taxes ends. If the revenues to the treasury are not high enough, this could bring the default closer, since other large budget spending is expected in the coming days, analysts say. The Congressional Budget Office this week predicted that if the fund disbursements are made, the government could run out of money before the end of the month. The department proposed to postpone it in whole or in part – this could give the government a delay of several weeks.
“I cannot stress enough how important it is for Congress to consider this issue (raising the national debt threshold. – Ed.), – said the head of the US Treasury Janet Yellen during her speech in the US Senate. “America must pay bills on time and in full.” She added that otherwise, the recovery of the national economy from the pandemic would be undermined.
The United States was able to prevent a default on the national debt in October – then the Senate approved a temporary increase in the government debt ceiling by $ 480 billion, to $ 28.9 trillion, until December 3. Yellen later called on lawmakers to approve or suspend a further increase in the limit, since after December 15, there may be a shortage of funds necessary to finance the work of the government.
Prior to that, the ceiling of the national debt was frozen until July 31. Since lawmakers did not have time to raise it, the Ministry of Finance from August 1 began to take temporary “emergency measures” so as not to exceed the established limit – it suspended investments in the fund for the payment of old-age and disability pensions, the postal service pensioners’ medical insurance fund and the state investment fund. Later, this regime was extended until December 3.
Over the past 50 years, Congress has raised the government debt ceiling (that is, the maximum amount of bonds that the Treasury can issue) and suspended the limit more than 80 times. To raise this threshold, the approval of 60 senators out of 100 is required. Now the votes in it are equally distributed between both parties, that is, Democratic senators need the support of at least 10 Republicans. The latter previously promised to block any initiative to solve the problem of the national debt, unless President Joe Biden and his party cut government spending or take other measures to reduce debt.
If Congress does not agree on the continuation of government funding, another shutdown may occur in the United States (the termination of government work with the temporary dissolution of civil servants).
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