What Happens If the US Treasury Runs Out of Cash? Here Are Yellen’s Options
- Treasury chief says ‘decisions’ to be made if X-date crossed
- Assumption for years has been that US keeps paying Treasuries
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The most urgent question in the bitter Washington showdown over the federal debt limit is one that the US Treasury refuses to answer: what happens if it runs out of cash?
While lawmakers and administrations past have come close to failing to address the debt limit in time — hours away in the 2011 instance — they’ve always reached a deal before the Treasury Department’s cash balance became too low to make all federal payments coming due.