Category: Study

The U.S. government is likely to run out of money to pay its bills on October 18 if the country’s debt ceiling is not raised, Treasury chief Janet Yellen warned congressional leaders on Tuesday.

She said that absent a congressional vote to lift the country’s debt ceiling, either to a specific amount or to some extended date to allow continued borrowing, Treasury officials expect the country “would be left with very limited resources that would be quickly depleted” after the next three weeks.

Senate Democratic Majority Leader Chuck Schumer later tried but failed to win unanimous support to hold a simple majority vote in the 100-member chamber to raise the debt ceiling rather than the 60-vote threshold needed for most major legislation.

But Republicans blocked the new effort to raise the borrowing limit, just as on Monday they defeated legislation that also would have averted a partial government shutdown starting on Friday.

The national government’s debt now stands at $28.4 trillion, but the U.S., virtually alone among governments throughout the world, has for decades imposed limits on its borrowing or occasionally lifted the debt ceiling until a certain date.

Congress has always raised the debt ceiling or lifted it entirely for a period of time to prevent the U.S. from defaulting on its debts, averting a worldwide financial crisis spawned by the biggest global economy.

But now the country is facing a new cash crunch without congressional approval for more borrowing.

Long-term government borrowing is designed to pay for measures already approved over the years by Congress, including aid supported by both Republican and Democratic lawmakers in the last year to help the U.S. economy recover from the coronavirus pandemic.

But Senate Republicans on Monday blocked the Democratic-supported measure to raise the debt ceiling, contending that a new debt limit would allow for passage of spending Republicans oppose, as much as $3.5 trillion that President Joe Biden and many congressional Democrats support to provide the biggest expansion of U.S. social safety net programs since the 1960s.

In her letter to congressional leaders, Yellen said the government’s daily cash flow varies widely, from nearly $50 billion a day over the last year to as much as $300 billion.

“As a result, it is important to remember that estimates regarding how long our remaining extraordinary measures and cash may last can unpredictably shift forward or backward,” she said. “This uncertainty underscores the critical importance of not waiting to raise or suspend the debt limit.”

“The full faith and credit of the United States should not be put at risk,” she said.

Yellen said that past debt limit impasses have shown “that waiting until the last minute can cause serious harm to business and consumer confidence, raise borrowing costs for taxpayers, and negatively impact the credit rating of the United States for years to come. Failure to act promptly could also result in substantial disruptions to financial markets, as heightened uncertainty can exacerbate volatility and erode investor confidence.”

The legislation rejected by Senate Republicans on Monday would also have averted a partial government shutdown on Friday, October 1, the start of a new fiscal year for the national government.

Republicans say they will support stand-alone legislation to keep the government operating into December while budget negotiations continue, but not a measure combining it with an increase in the debt ceiling. That could force the narrow Democratic majorities in both chambers of Congress to approve the debt ceiling increase on their own without Republican support.

“We are not willing to help Democrats raise the debt ceiling while they write a reckless taxing and spending spree of historic proportions behind closed doors,” Senate Republican leader Mitch McConnell told the Senate.

Democrats say some of the nation’s debt was incurred during the administration of President Donald Trump because of large tax cuts he supported. Historically, both parties have voted to raise the limit to prevent the United States from defaulting on its debts.

Schumer said that the Republican action is “one of the most reckless and irresponsible votes I have seen take place in the Senate” and that “the Republican Party has solidified itself as the party of default.”

In addition to debate on the debt ceiling, Congress is in the midst of contentious discussions on the Democrats’ plan for the social safety net spending, with no Republicans supporting it.

There is more bipartisan support for a $1 trillion infrastructure plan to fix the country’s deteriorating roads and bridges and expand broadband internet service throughout the country. House Speaker Nancy Pelosi has scheduled a Thursday vote on the legislation, which the Senate has already approved.

Source: Voice of America

LAGOS – Authorities in northern Nigeria announced three separate groups of kidnapped students were freed within 24 hours, prompting speculation late Friday that large ransoms had been paid to the gunmen blamed for a spate of recent abductions.

Among those now free are some of the youngest children ever taken hostage in Nigeria, a group of 90 pupils who had spent three months in captivity. Hours after those youngsters were brought to the Niger state capital, police in Zamfara state said that 15 older students also had been freed there.

Then late Friday, word came of a third hostage liberation in Kaduna state. Thirty-two more of the students taken from a Baptist high school in early July also had been freed, according to the Rev. Joseph Hayab, chairman of the Kaduna state chapter of the Christian Association of Nigeria.

The wave of releases comes after more than 1,000 students have been kidnapped since December, according to an AP tally. While earlier school abductions had been blamed on Islamic extremists in the northeast, authorities have only said that bandits are behind the latest kidnappings for ransom.

“The happiness can’t be quantified,” said Yahya Aliyu Babangida, 54, a teacher whose two children aged 7 and 17 were among those who had been kidnapped from the Salihu Tanko Islamic School in Tegina in late May.

Some of the kidnapped preschoolers who spent months in captivity were just 4 years old, and authorities said Friday that one child had died during the ordeal. Several others were undergoing medical treatment after their release late Thursday.

“They are exposed to this harsh weather, no food, mosquitos everywhere,” he said. “Some of them had never been outside the comfort of their homes.”

News of the children’s release was celebrated across Nigeria, where abductions have stepped up pressure on the government to do more to secure educational facilities in remote areas.

But questions remained Friday about how much ransom had been paid to secure the children’s release, and if so whether that could in turn fuel further abductions by the unknown armed groups referred to locally as bandits.

Muhammad Musa Kawule, 42, acknowledged paying intermediaries in hopes of securing his 6-year-old daughter’s freedom.

“I spent a lot of money but today, I’m happy,” he told The Associated Press on Friday. He did not specify how much he had paid nor whether government officials had been involved.

The youngsters were later brought to the Niger state capital, Minna, where they underwent medical checkups and met the governor. Video showed scores of children as young as kindergartners coming out of white minibuses, the little girls wearing long blue hijabs known as chadors.

While Nigeria has seen scores of school abductions for ransom, the Niger state kidnappings left people aghast because the children were so young. The ramifications also could be long lasting as parents reconsider whether to send their children to school.

“This has affected the morale and confidence of the people and has even made parents think twice before they send their children to school,” Niger state Gov. Abubakar Sani Bello said of the children’s abduction. “We will do whatever it takes to bring (the kidnappers) to justice.”

As the attacks have mounted across the north, there are also signs they are becoming more violent.

After one kidnapping at a university in Kaduna state earlier this year, gunmen demanded ransoms equivalent to hundreds of thousands of dollars. They killed five students to compel other students’ parents to raise the money and later released 14.

Also Friday, Zamfara state police spokesperson Mohammed Shehu said that 15 other students had been handed over to officials on Friday, 11 days after they were abducted from the College of Agriculture and Animal Science in Nigeria’s troubled northwest.

It was not immediately clear how they were rescued, but the students are now being looked after by Zamfara state officials and will soon be reunited with their parents, authorities said.

Source: Voice of America