Treasury reportedly making plans for payments in case of debt ceiling breach

Treasury officials are crafting a blueprint that would delay some payments to agencies after June 1, the date that the department expects it will exhaust its borrowing authority, according to the Wall Street Journal, citing people familiar with the matter.The contingency plan mirrors preparations made by the Obama Treasury during the 2011 debt ceiling fight, which were only made public years later.

If the Treasury Department lacks the funds to make a full day’s worth of payments, it would delay those payments until it has enough cash to do so, rather than picking and choosing which bills to pay. While there have been discussions about the plan, the Treasury Department hasn’t yet implemented the payment changes.

During the worst debt ceiling standoff in recent history in 2011, the Treasury developed a contingency plan to use incoming tax revenue to keep making payments on the principal and interest on the federal debt. Other payments would be delayed until they could be paid in full as new tax payments came in.

“I don’t know how you could possibly choose between Social Security and veteran’s benefits, between Medicare and food assistance,” he said.

Loans Loans Latest News, Loans Loans Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Inside the Treasury Department team monitoring early economic warning signs as default threat looms | CNN PoliticsNearly five months before the US was projected to hit the debt ceiling, a small team inside the Treasury Department began alerting top officials to early effects already being felt in the US financial system.
Source: CNN - 🏆 4. / 95 Read more »

Treasury yields nudge higher as bets on July rate hike riseBond yields moved higher on Thursday as traders continued to discount debt-ceiling negotiations and Federal Reserve policy trajectory.
Source: MarketWatch - 🏆 3. / 97 Read more »

U.S. Treasury debt announcement signals to some June 1 is not 'X-date'The U.S. Treasury on Thursday announced a slate of T-bill auctions for early next week that some market participants see as an indication that the debt ceiling's so-called 'X-date' may not in fact be June 1.
Source: Reuters - 🏆 2. / 97 Read more »

Yields on June Treasury bills rise to 7%, signaling investor fear over debt ceilingThe standoff over the debt ceiling is raising the prospect of default and sending yields on certain Treasury bills soaring. Yields on securities maturing in early June soared on Thursday, with at-risk bills maturing on June 6 featuring yields above 7%.
Source: dcexaminer - 🏆 6. / 94 Read more »

Default on debt isn't June 1 and Treasury isn't 'credible': GOP Rep. Byron DonaldsInsider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Source: BusinessInsider - 🏆 729. / 51 Read more »