[Benjamin]

U.S. Risks Fiscal Cliff in Fall Amid Partisanship on Debt
by Steven T. Dennis, Laura Davison and Mike Dorning
Mon, August 9, 2021
https://news.yahoo.com/u-risks-fisca...144828770.html

Without a debt-limit increase, the government will run out of money to pay all of its bills soon after Congress returns from a recess in September. Lawmakers also face a Sept. 30 deadline to fund government operations after the end of the current fiscal year.

Yellen has said the government could exhaust special measures and run out of cash “soon after Congress returns from recess” in September.

The Congressional Budget Office forecasts lawmakers will have until October of November to raise or suspend the debt limit. Bank of America strategist Mark Cabana estimated in a note to clients that the Treasury won’t run out of money until mid- to late-November.

Despite moments of drama, the White House and Congress have always resolved deadlocks over the debt limit without a default.
But a protracted and acrimonious fight in 2011 between President Barack Obama and congressional Republicans took the country to the brink, leading to the first first-ever downgrade of the U.S. sovereign credit rating and contributing to a stock-market slide.

The benchmark S&P 500 fell almost 17% in less than three weeks, a plunge that started as the debt impasse worsened but continued even after a default was averted. With concerns also rising over a sovereign debt crisis in Europe at the time, the index took more than six months to recover to its July 22, 2011, close.

Most GOP senators speaking on the matter have been adamant that they won’t support extending the debt limit in a short-term spending bill, known as a continuing resolution. Agencies will run out of spending authority when the fiscal year ends on Sept. 30, and absent so-far elusive consensus on appropriations bills the government would shut down without the must-pass stop-gap measure.