Politics The US Treasury is now paying off the government's bills because Congress missed an important deadline
South Africa's power cuts a key issue in local elections
JOHANNESBURG (AP) — As South Africa heads into crucial local elections Monday, the country has been hit by a series of crippling power blackouts that many critics say highlight poor governance. With South African residents and businesses struggling to cope with cuts in electricity for up to six hours a day, the government’s failure to provide a stable power supply is a burning election issue. The country’s state-owned power utility Eskom, which provides about 90% of South Africa’s electricity, has for years been marred by allegations of mismanagement and corruption.
- Treasury is starting to pay off the government's bills because Congress missed an important deadline.
- Lawmakers failed to raise or suspend the debt ceiling, largely due to GOP resistance.
- Treasury is using "extraordinary measures" to pay its bills, but Congress must act before the fall.
The Treasury Department took initial steps to start paying off the federal government's bills on Monday because Congress missed a July 30 deadline to either raise or suspend the debt ceiling.
Treasury Plans to Borrow $1T During Quarter, But Only if Congress Deals With Debt Ceiling
Treasury Secretary Jenet Yellen warned a debt default would be catastrophic could push the country into a recession. The current borrowing limit stands at $28.88 trillion after the $480 billion increase approved by Congress last month. The debt subject to that limit is currently $25 million below the limit. But Yellen can use a variety of bookkeeping maneuvers to remove investments from various government employee pension funds to allow for further borrowing for a limited period of time.
In a letter to Congressional leaders, Treasury Secretary Janet Yellen said she's starting what are known as "extraordinary measures" to keep the federal government afloat. She urged lawmakers to take swift action to either raise or suspend the debt ceiling, which hit its statutory limit on August 1.
"I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible," Yellen said in the letter. The nonpartisan Congressional Budget Office said in an analysis that Treasury would exhaust its special powers sometime in September or October. Absent action from Congress, the US would then default on its loans.
A default from the federal government could precipitate a chain reaction of cash shortages that could hit bondholders including the people, businesses, and foreign governments who hold US debt. It couldin interest rates.
Buffalo Bills Links, 11/2: Recapping the win over Miami
The good, the bad, and the ugly from Buffalo’s 26-11 squishing of the Fish.Today’s edition of the Bills daily links leads off by recapping Buffalo’s fifth win on the season, including game recaps, report cards, observations, and more as the Bills extended their lead in the AFC East race to two games in the loss column.
Yellen said the duration of "extraordinary measures" was uncertain because of the economic impact from the pandemic on tax receipts. Last month, she noted that raising the debt ceiling does not prompt more federal spending, it only permits the government to pay back what it owes.
"Failure to meet those obligations would cause irreparable harm to the U.S. economy and the livelihoods of all Americans," Yellen wrote in a letter to House Speaker Nancy Pelosi.
Congress last suspended the debt ceiling for two years under President Donald Trump in July 2019. But now, many Republicans arewithout ensuring spending cuts from Democrats, as they similarly did when they controlled Congress under President Barack Obama. Senate Minority Leader Mitch McConnell suggested last month Democrats would have to raise the debt ceiling on their own.
Congress has until December 15 to avoid the catastrophe of the US refusing to pay its bills, Janet Yellen says .
The deadline gives Congress a few more days to raise the debt ceiling. Failure risks "a financial crisis and economic recession," according to Yellen.The US will be unable to pay its bills past December 15, Treasury Secretary Janet Yellen said in a Tuesday letter to Congress. That gives lawmakers slightly more time to raise or suspend the limit on government debt, as Yellen's prior forecast had the US hitting the ceiling on December 3.