September 8, 2021
The Honorable Nancy Pelosi
U.S. Home of Representatives
Washington, DC 20515
Pricey Madam Speaker:
I’m writing to observe up on my earlier letters concerning the debt restrict and to supply extra info concerning the Treasury Division’s skill to proceed to finance the federal government within the absence of Congressional motion to handle the debt restrict.
After the debt restrict was reinstated on August 1, Treasury started using sure extraordinary measures to proceed to finance the federal government on a brief foundation. These measures, that are licensed by legislation and have been utilized in earlier debt restrict impasses, embrace a suspension of sure investments within the Civil Service Retirement and Incapacity Fund, the Postal Service Retiree Well being Advantages Fund, and the Authorities Securities Funding Fund of the Federal Staff’ Retirement System Thrift Financial savings Plan. As soon as all obtainable measures and money available are absolutely exhausted, the USA of America could be unable to satisfy its obligations for the primary time in our historical past.
Our estimates of the time frame that extraordinary measures will final have been refined in latest weeks, though they proceed to be topic to appreciable uncertainty as a result of regular challenges of forecasting the funds and receipts of the U.S. authorities, together with the uncertainty within the stage of company and particular person taxes due September 15, heightened by the extra uncertainty as a result of pandemic and associated financial reduction, and different components.
Given this uncertainty, the Treasury Division isn’t in a position to present a selected estimate of how lengthy the extraordinary measures will final. Nevertheless, primarily based on our greatest and most up-to-date info, the most definitely end result is that money and extraordinary measures might be exhausted through the month of October. We are going to proceed to replace Congress as extra info turns into obtainable.
We now have realized from previous debt restrict impasses that ready till the final minute to droop or enhance the debt restrict may cause severe hurt to enterprise and client confidence, increase short-term borrowing prices for taxpayers, and negatively influence the credit standing of the USA. A delay that calls into query the federal authorities’s skill to satisfy all its obligations would seemingly trigger irreparable injury to the U.S. economic system and world monetary markets. At a time when American households, communities, and companies are nonetheless affected by the results of the continuing world pandemic, it could be notably irresponsible to place the complete religion and credit score of the USA in danger.
I once more be aware that Congress has addressed the debt restrict in recent times by means of common order, with broad bipartisan help. I respectfully urge Congress to guard the complete religion and credit score of the USA by appearing as quickly as doable.
Janet L. Yellen