Debt Ceiling Deadline Moved Up to August From November
1. Not Much Time Left For Trump/GOP Legislative Agenda
2. Congress Has a Jam-Packed Schedule For June & July
3. Trump Administration Officials Differ Over Debt Ceiling
4. What Could Happen if the Debt Ceiling is Not Increased
5. June & July: Let the Debt Ceiling Political Games Begin
You may recall back in early April when the mainstream media was warning us of a government shutdown which was to occur on April 29. You may also recall that in my April 11 issue of this E-Letter, I stated that there would not be a government shutdown on April 29 or anytime soon thereafter.
What the media failed to notice (or ignored) was the fact that the Treasury Department stated in early April that it could fund the government using so-called “extraordinary measures” until October or maybe even early November. So no government shutdown was possible until that time.
Yet in late May Treasury Secretary Steven Mnuchin warned Congress that US tax receipts have slowed in recent months, and that the government is now likely to reach the debt ceiling of $19.809 trillion as early as sometime in August. He called on lawmakers in both chambers of Congress to pass a new debt ceiling increase before the long recess in August and early September.
The fear is that the Treasury will exhaust its extraordinary funding measures sometime in August, and the government could be forced to default on some of its debt obligations. This has never happened before and probably won’t happen this time either. But…
While there is time between now and when Congress adjourns on July 28 to increase the debt ceiling, both the House and the Senate have a lot of important business on their plates in the meantime. There is also the week-long House/Senate recess for the Fourth of July. Thus, the risk of not getting a debt ceiling increase by recess on July 28 is higher than usual in my opinion.
A failure to reach a debt ceiling increase by July 28 could cause havoc in the financial markets just ahead. For that reason I will focus on the debt ceiling issues we need to be aware of today.