| 27 May 2024, Monday |

Treasury Reiterates Warning US Government Could Run Out of Money to Service Debt By October

The US government could run out of money as early as next month to service its debt, Treasury Secretary Janet Yellen said on Wednesday, reiterating her warning that emergency measures put in place to raise cash could be exhausted soon.

Yellen announced in August that the Treasury Department was suspending fully or partly investments in the Civil Service Retirement and Disability Fund, the Postal Service Retiree Health Benefits Fund and a section of the Federal Employees Retirement to free up funds to service the national debt.

These were flexible investments that could be made in due course, and other US treasury secretaries have also suspended them as well in times of emergency, she said.

Negotiations on the debt ceiling between Democrat lawmakers led by President Joe Biden and their Republican rivals have dragged on for months, with no immediate solution in sight. Democrats and Republicans have squared off over the debt ceiling several times over the past decade and briefly allowed the United States to surpass it during the Trump administration.

The secretary warned in July that the United States faced a default risk on its debt by October as the deadline for the two-year suspension of its debt limit neared. In her latest update, she wrote to US House Speaker Nancy Pelosi that there was “considerable uncertainty” on how long the Biden administration could continue stretching its debt obligations at the current rate.

  • Sputnik