The passage of President Biden’s sweeping economic plan could shorten the time frame in which Congress must act to avert a debt default even as Democrats remain divided over how to raise the borrowing limit, The Hill reported. The U.S. last week exhausted the $480 billion in new debt authorized by a bipartisan deal last month and may need to raise or suspend the ceiling shortly after December begins. The Treasury Department has already begun taking “extraordinary measures” to avert a default, but Treasury Secretary Janet Yellen warned it may not be able to do so beyond Dec. 3. While budget experts say the Treasury Department should be able to keep the U.S. solvent beyond that date, a provision of the bipartisan infrastructure deal could accelerate that countdown. The $1.1 trillion measure would transfer $118 billion from the Treasury’s General Fund to the Highway Trust Fund. It’s unclear when Treasury would have to make that transfer, but doing so before a debt ceiling increase would deplete cash that could be used to avert a default.
