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.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs