According to a newly released report, the U.S. Treasury is predicted to run out of money by the middle of November. If funds run out, Social Security and veterans payments to Utahns and Americans elsewhere could be affected.
Steve Bell is the senior director of economic policy at the Bipartisan Policy Center in Washington, D.C. He said that revenues over the next month will not be enough to pay the bills.
“There are certain expenditures that under law have to be paid as soon as they’re due; Social Security, interest on the public debt, issuing new public debt, veteran’s payments, Medicare,” Bell said. “For example, in early November there will be a very large Social Security payment. That’s why we think that somewhere between the 10th and 19th [of November] that the Department of Treasury will not have enough cash on-hand to be able to pay all the bills that are due to be paid that day.”
Treasury Secretary Jacob Lew has already announced that by Nov. 3, federal trust fund money will not be available to draw from to make payments. Tax revenues have not been as high as predicted earlier this year.
Bell said that the growing national debt is making a revenue recovery unlikely.
“Deficits are only half a trillion dollars this year—and I guess to some people that’s a victory—but deficits add to the debt, whether they’re large deficits or small deficits. We are falling behind every day,” he said. “So, there’s no way eventually to make it up. We’re not going to have a huge burst of growth in a very short period of time that will mean a lot more revenue coming in and catch up, we won’t do that.”
Bell also said that Congressional gridlock has certainly not helped the situation, noting that threats of default, once rare, have now become a fairly regular part of dealings in Congress.
“The way we’ve been playing it the last six years in Washington makes everyone think this is the normal way we do business. I was staff director of the Senate Budget Committee back in the 80’s and early 90’s and, really, it was relatively rare to ever get this close to a debt default,” he said. “The use of the debt bill as a way to hold the government hostage is a relatively new phenomenon, especially in the last six years where we’ve had this deeply divided Congress.”
Nearly 300,000 Utahns currently receive Medicare benefits.
