'DC (Debt Ceiling) Wars' Likely To Be Waged Until Year's End Treasury Secretary Janet Yellen. (Greg Nash/POOL/AFP via Getty)
With Congress soon returning and the Biden Administration adamant about enacting its $3.5 trillion infrastructure package, several experts told Newsmax they expect the fight over lifting the debt ceiling to be waged until the end of the year.
The growing nervousness about the pending “DC (Debt Ceiling) Wars” was exacerbated Wednesday by a letter to Members of Congress from Secretary of the Treasury Janet Yellen warning that the U.S. could default on its $23.3 trillion debt sometime in October unless Congress raises or suspends the debt limit.
Although the issue of whether to raise the debt limit has been a source of concern annually for several years, Yellen’s warnings come at a time the administration and the left wing of the Democratic Party are trying desperately to enact the infrastructure package with its $3.5 trillion pricetag.
On September 2, the package ran into a roadblock in the evenly-divided 100-member senate as Sen. Joe Manchin, D, W.Va., left no doubt where he was coming from in a strongly-worded op-ed in the Wall Street Journal headlined “Why I Won’t Support Spending Another $3.5 Trillion.”
Stating his concern that an increased debt could deal a big blow to Social Security and Medicare, Manchin also made clear he wants a “strategic pause” in the just-begun budget reconciliation process. From there, Manchin concluded, he wants to start from scratch and reach a new number that addresses needs in infrastructure and nothing else.
This is precisely what Sen. Bernie Sanders, I-Vt., Rep. Alexandra Ocasio-Cortez, D-N.Y., and others on the left in Congress will not stomach — fully committed to the $3.5 trillion figure and funding the measures dealing with climate change and the “Green New Deal” that are included in the package.
With the fiscal year concluding on September 30, the Treasury Department can no longer issue debt or refinance existing debt. Instead, it can pay the government’s bills by drawing from what are known as “trust fund reserves.”
The cash is expected to run out sometime in October or November — known as the “X-date” — and Republicans in Congress will most likely agree to fund the government until the end of the year through a continuing resolution that temporarily lifts the debt ceiling.
By year’s end, however, Congress will have to address the issue of lifting the debt ceiling again and do it or otherwise face the U.S. defaulting on its creditors.
John Gizzi is Newsmax's chief political columnist and White House correspondent. He is “the man who knows everyone in Washington” as well as many who hold elected positions and party leadership roles throughout America. He has appeared on countless radio and TV shows in America and Europe. He is the recipient of the William A. Rusher Award for Journalistic Excellence and was named Journalist of the Year by the Conservative Political Action Conference in 2002. For more of his reports, Go Here Now.