US Readies Arsenal to Avoid Breaching Borrowing Cap

Source: WSJ

United States Treasury Secretary Janet Yellen unveiled additional measures to prevent breaching the government’s borrowing limit, which was reimposed on Sunday.

• Yellen said the Treasury Department will suspend reinvestments by a number of retirement funds for civil servants and postal workers starting Monday.
• The funds will only be made whole once the debt limit is either suspended or increased, which Yellen urged Congress to do as soon as possible.
• Yellen did not give a timetable for the emergency measures but earlier said these could be exhausted before the summer recess in September.
• The Treasury Department expects to issue $673 billion of debt between July and September should the limit be raised or suspended.
• The Treasury also plans to borrow another $703 billion in the fourth quarter of 2021.
• The debt limit was reinstated at around $28.5 trillion on Sunday, including public and government debt.