World News

US: No Immediate Cash Shortage If Borrowing Limit Not Increased

The statue of Grief and History stands in front of the U.S. Capitol Dome in Washington, Oct. 16, 2013.
The statue of Grief and History stands in front of the U.S. Capitol Dome in Washington, Oct. 16, 2013.
VOA News
The U.S. says it would not immediately run out of cash if Congress fails to increase the country's $16.7 trillion borrowing limit to avoid a default, but would within days.

Unless Congress acts Wednesday to increase the debt ceiling, the government will run out of borrowing authority on Thursday to raise more money to pay its bills, including interest on U.S. securities held by China, Japan and other overseas investors.

The government says it has about $30 billion on hand, and some money routinely coming into the Treasury on a regular basis, to pay its bills for a few days. But financial analyst Steve Bell of the Washington-based Bipartisan Policy Center told VOA that absent new borrowing authority, the government could run out of cash by next week.

"Sometime between Thursday and probably next week sometime, they're going to not have enough cash on hand to actually pay all the bills we have that come in on a daily basis," he said.

In the next two weeks, the government has several major bills coming due, billions of dollars it owes to investors who have bought U.S. government bonds and monthly government pensions to older Americans. The government has not said what day it expects to run out of cash, but the Congressional Budget Office says it could be next Tuesday.

Some critics of government spending practices, chiefly Republican opponents of U.S. President Barack Obama, a Democrat, say the government could continue making interest payments on securities held by investors so the country technically would not default.

But analysts like Bell say that if the country misses payments on any of its bills it would be defaulting. The U.S. has had small-scale technical defaults in the past, but Bell says the intent of a default this time would be unprecedented.

"This would be the first time the United States has just said as a matter of policy, we're not going to pay our bills," he said.

He said the government, rather than trying to prioritize which bills to pay, such as those owed to overseas investors or U.S. pensioners, is more likely to delay, day by day, paying bills until it has enough cash on hand to make all the payments it should have made days earlier. But that, he says, can only last for a short time and payment of bills would be increasingly delayed.

Leaders in the U.S. Senate are attempting to negotiate a settlement of the Washington financial impasse, to increase the debt cap and end the 16-day partial government shutdown.

But such a fix would also have to be approved by the fractious House of Representatives, where a conservative minority has blocked efforts to end the stalemate while demanding changes to Obama's health care reforms, his signature legislative achievement.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
With HIV, Can We Get to Zero?i
Carol Pearson
November 29, 2015 1:23 PM
The theme of this year's World AIDS Day is "Getting to Zero." The U.N. says new HIV infections have been reduced by 35 percent since 2000 and AIDS-related deaths are down by 42 percent since the peak in 2004. VOA's Carol Pearson takes a look at what it might take to actually have an AIDS-free generation.

Video With HIV, Can We Get to Zero?

The theme of this year's World AIDS Day is "Getting to Zero." The U.N. says new HIV infections have been reduced by 35 percent since 2000 and AIDS-related deaths are down by 42 percent since the peak in 2004. VOA's Carol Pearson takes a look at what it might take to actually have an AIDS-free generation.

Video Political Motives Seen Behind Cancelled Cambodian Water Festival

For the fourth time in the five years since more than 350 people were killed in a stampede at Cambodia’s annual water festival, authorities canceled the event this year. Officials blamed environmental reasons as the cause, but many see it as fallout from rising political tensions with a fresh wave of ruling party intimidation against the opposition. David Boyle reports from Phnom Penh.

Video African Circus Gives At-Risk Youth a 2nd Chance

Ethiopia hosted the first African Circus Arts Festival this past weekend with performers from seven different African countries. Most of the performers are youngsters coming form challenging backgrounds who say the circus gave them a second chance.

Video US Lawmakers Brace for End-of-Year Battles

U.S. lawmakers are returning to Washington for Congress’ final working weeks of the year. And, as VOA's Michael Bowman reports, a full slate of legislative business awaits them, from keeping the federal government open to resolving a battle with the White House over the admittance of Syrian refugees.

Video Taiwan Looks for Role in South China Sea Dispute

The Taiwanese government is one of several that claims territory in the hotly contested South China Sea, but Taipei has long been sidelined in the dispute, overshadowed by China. Now, as the Philippines challenges Beijing’s claims in an international court at The Hague, Taipei is looking to publicly assert its claims. VOA’s Bill Ide has more from Beijing.

Video After Terrorist Attacks, Support for Refugees Fades

The terrorists who killed and injured almost 500 people around Paris this month are mostly French or Belgian nationals. But at least two apparently took advantage of Europe’s migrant crisis to sneak into the region. The discovery has hardened views about legitimate refugees, including those fleeing the same extremist violence that hit the French capital. Lisa Bryant has this report for VOA from the Paris suburb of Cergy-Pontoise

Video Syrian Refugees in US Express Concern for Those Left Behind

Syrian immigrants in the United States are concerned about the negative tide of public opinion and the politicians who want to block a U.S. plan to accept 10,000 Syrian refugees. Zlatica Hoke reports many Americans are fighting to dispel suspicions linking refugees to terrorists.

Video Thais Send Security Concerns Down the River

As Thailand takes in the annual Loy Krathong festival, many ponder the country’s future and security. Steve Sandford reports from Chiang Mai.

Video Islamic State Unfazed by Losses in Iraq, Syria

Progress in the U.S.-led effort to beat Islamic State on its home turf in Iraq and Syria has led some to speculate the terror group may be growing desperate. But counterterror officials say that is not the case, and warn the recent spate of terror attacks is merely part of the group’s evolution. VOA National Security correspondent Jeff Seldin has more.

Video Belgium-Germany Border Remains Porous, Even As Manhunt For Paris Attacker Continues

One of the suspected gunmen in the Nov. 13 Paris attacks, Salah Abdeslam, evaded law enforcement, made his way to Belgium, and is now believed to have fled to Germany. VOA correspondent Ayesha Tanzeem makes the journey across the border from Belgium into Germany to see how porous the borders really are.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

VOA Blogs