September 8, 2021
The Honorable Nancy Pelosi
U.S. Home of Representatives
Washington, DC 20515
Pricey Madam Speaker:
I’m writing to comply with up on my earlier letters relating to the debt restrict and to offer extra data relating to 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 regulation 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 Workers’ 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 fulfill its obligations for the primary time in our historical past.
Our estimates of the time period that extraordinary measures will final have been refined in current 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 degree of company and particular person taxes due September 15, heightened by the extra uncertainty as a result of pandemic and associated financial aid, and different components.
Given this uncertainty, the Treasury Division will not be capable of present a selected estimate of how lengthy the extraordinary measures will final. Nevertheless, primarily based on our greatest and most up-to-date data, the most certainly consequence is that money and extraordinary measures might be exhausted through the month of October. We’ll proceed to replace Congress as extra data turns into obtainable.
We’ve realized from previous debt restrict impasses that ready till the final minute to droop or improve the debt restrict could cause critical hurt to enterprise and client confidence, increase short-term borrowing prices for taxpayers, and negatively impression the credit standing of the USA. A delay that calls into query the federal authorities’s skill to fulfill all its obligations would possible trigger irreparable harm to the U.S. economic system and international monetary markets. At a time when American households, communities, and companies are nonetheless affected by the consequences of the continuing international pandemic, it might be significantly 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 lately via common order, with broad bipartisan assist. I respectfully urge Congress to guard the complete religion and credit score of the USA by performing as quickly as doable.
Janet L. Yellen