There are just 52 days until the United States government runs out of money.
Even the secretary of the Treasury isn’t quite sure.
One thing is certain: With the passing of August, the official accounting of the U.S. debt has remained stuck at exactly $16,699,396,000,000 for another month – and, as of Wednesday, 109 days in a row.
The debt has been frozen at that amount because of an accounting trick Treasury Secretary Jack Lew calls “extraordinary measures.”
Those measures have prevented the government from defaulting on its obligations and allowed it to keep borrowing for 108 days, while keeping the official debt just $25 million below the legal debt limit set by Congress of $16,699,421,000,000.
Out of cash
But Lew knows those extraordinary measures cannot last forever, and the clock is ticking. But he doesn’t know exactly when midnight will strike.
One month ago, Lew estimated he could keep borrowing until Oct. 11, the last day Congress is in session before the Columbus Day recess.
But last week, he revised his estimate to an imprecise “middle of October” deadline before the federal government can no longer borrow the money it needs to keep running.
Lew has sent three letters to House Speak John Boehner, R-Ohio, to explain the extraordinary situation since May, when federal borrowing hit the legal debt limit.
The most recent letter, sent Aug. 26, revealed the U.S. will be down to just $50 billion actual cash on hand by the middle of October.
That’s all that will be left to fund Social Security, Medicare, federal employee salaries and other obligations included in the 80 million payments the federal government makes each month.
But it would not be enough.
The latest round of the dilemma began May 17, when Lew wrote to Boehner to inform him, having nearly hit the debt limit, the Treasury Department would begin using more extraordinary measures, such as suspending certain pension contributions to “free up approximately $260 billion in headroom under the limit.”
How we got here
The national debt continues to rise because the U.S. Treasury spends more money than it brings in through taxes, fees and other revenue.
The difference between spending and revenue, or annual deficit, is much smaller this year, but it is still expected to be around $600 billion for the fiscal year that ends Sept. 30.
The U.S. government actually hit its $16.4 trillion debt limit at the end of last year, but the Treasury Department began using the extraordinary measures to help delay default until Congress agreed to suspend the debt limit through May 18.
The next day, the debt limit was raised to almost $16.7 trillion.
Lew then announced a way to allow the government to pay its bills until September.
Taxpayer-owned Fannie Mae would make a one-time dividend payment of nearly $60 billion to the U.S. government.
Thanks to a housing market recovery, the fortunes of the bailed-out housing finance corporation had improved enough to pay the dividend after posting a record first-quarter profit.
Lew had thought the Treasury Department would stop using the extraordinary measures on Aug. 2.
But on that day, he wrote another letter to Boehner, explaining his new estimate was the government would need to keep using the measures until Oct. 11 to keep borrowing without exceeding the legal limit.
Read more at http://www.wnd.com/2013/09/unheard-of-debt-stuck-at-16-7-trillion-for-109-days/#toycYMyfTC30Fhkm.99