On September 25, US Treasury Secretary Jack Lew said that emergency measures to help the Government spend money will expire before October 17.
In a letter to parliamentarians, Secretary Lew said this amount `is far from enough to cover recent expenditures that could reach $60 billion.`
After the announcement of the Ministry of Finance, the US Congressional Budget Office yesterday also predicted that the Government would run out of money around October 22 – October 31.
Jack Lew thinks the Government will run out of money in October. Photo: BI
The Ministry of Finance previously predicted that emergency measures would expire in mid-October. At that time, they would have $50 billion in cash left.
In addition, the Government’s new fiscal year will begin on October 1, but the budget bill for 2014 has not yet been approved.
On September 20, the Republican-dominated US House of Representatives passed a temporary budget bill worth $986 billion, funding the operations of federal agencies during the period October 1 – December 15.
Analysts believe that the Senate will reject this bill and pass its own budget plan.
President Obama also spoke out last weekend urging Congress to quickly pass the budget bill so that the Government does not close after October 1 and raise the debt ceiling so the US can continue spending.
In his letter to Congress, Mr. Lew also commented that the Republican Party’s proposal to `prioritise` payments to the Treasury, such as paying interest to bondholders first, is `simply another word for default.`
Some Republican lawmakers say the Treasury Department could try to maintain the amount longer to give lawmakers more time to decide.
Republican lawmakers in the House want to use the condition of raising the debt ceiling for one year in exchange for an agreement to delay implementation of the White House’s health care law, postpone changes to the Medicare program, tax fixes and some laws.
However, the White House and many Democratic lawmakers have announced that they will not accept any conditions associated with raising the debt ceiling and will not negotiate with Republicans on this issue.
Earlier this week, Moody’s credit rating agency also said that if the debt ceiling is not raised, `the assumption that the US Government may default on its debt will disturb the financial market, breaking the confidence of investors and businesses.`
Chris Krueger – analyst at Washington Research Group said the possibility of the debt ceiling not being raised is 40%.
In August 2011, it took lawmakers months to come to an agreement to raise the public debt ceiling, less than 24 hours before the US officially fell into debt default.