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U.S. Could Run Out of Cash by July, Analysis Finds

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The Bipartisan Policy Center estimates that the so-called X-date could fall between mid-July and early October if Congress does not lift or suspend the nation’s debt limit.The United States could run out of cash to continue paying its bills by mid-July if Congress does not take action to raise or suspend the nation’s debt limit, according to an analysis on Monday by the Bipartisan Policy Center.That deadline, known as the “X-date” — the moment when the United States is unable to meet its financial obligations and might default on its debt — is a fiscal milestone that’s among the most closely watched in Washington and on Wall Street.The date is subject to considerable uncertainty. It relies on estimates of how much wiggle room the Treasury has to use accounting maneuvers — known as “extraordinary measures” — to keep paying the government’s bills by shifting money around. The Bipartisan Policy Center, a think tank, provided estimates suggesting that the X-date could come as late as the beginning of October.Efforts to address the debt limit will likely consume Congress and the Trump administration later this year as Republicans race to enact trillions of dollars of tax cuts.The debt limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.Because the federal government runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. Those obligations include funding for social safety net programs, salaries for members of the armed forces and paying investors who have bought U.S. government debt in exchange for interest payments.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Privatization of Fannie Mae and Freddie Mac Means

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    Fannie Mae and Freddie Mac were bailed out by the government during the housing crisis nearly 17 years ago. The Trump administration is considering letting them go private again.Fannie Mae and Freddie Mac, two giant mortgage finance firms, have been controlled by the federal government for nearly 17 years, but a long-dormant idea of making them private businesses is starting to make the rounds in Washington again.Scott Turner, the secretary of Housing and Urban Development, said in an interview this week that coordinating the effort to privatize the two firms would be his priority. One of President Trump’s backers, the hedge fund investor William A. Ackman, is calling on the president to quickly move forward on the privatization.But Fannie and Freddie underpin the nation’s $12 trillion mortgage market, so they need to be handled with care. Scott Bessent, the Treasury secretary, said last month that any plan for ending the so-called conservatorship of the two firms “should be carefully designed and executed.”The last time Mr. Trump was president, a number of his advisers took steps toward coming up with a plan for releasing Fannie Mae and Freddie Mac from government control. In the end, the first Trump administration took no action, and the Biden administration put the issue on the back burner.Here is a quick primer on why Fannie and Freddie are so critical to the mortgage market and some of the issues likely to come up in the debate over how to end the conservatorship.What do Fannie and Freddie do?“No conservatorship should be indefinite,” Scott Bessent, the Treasury secretary, wrote in a response to questions before his confirmation.Haiyun Jiang for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Chose 8 Economic Experts Who Will Defend Tariffs and Lower Taxes

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    President-elect Donald J. Trump has moved beyond the team-of-rivals approach from his first term and chosen economic aides who will defend tariffs and tax cuts.Alan RappeportAna Swanson and President-elect Donald J. Trump put economic policy at the center of his campaign and, in assembling his economic team, has turned to a group of Wall Street executives, economists, lawyers and academics to help carry out his plans to cut taxes, impose tariffs and slash regulations.In contrast to his first term, when Mr. Trump installed advisers who had disparate views about areas like free trade and tariffs, the men the president-elect has selected this time around have, at least for now, professed to be in sync with his agenda.Still, it remains to be seen how well his advisers work together and whether those with more traditionally conservative views will be willing to go along with Mr. Trump’s unconventional approach to economic policy.Scott BessentTreasury SecretaryStefani Reynolds/BloombergWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Yellen Issues Debt Limit Warning to Congress

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    The Treasury secretary urged Congress to protect the full faith and credit of the United States by raising the debt limit.Treasury Secretary Janet L. Yellen informed Congress on Friday that if lawmakers do not act to raise or suspend the nation’s debt limit as soon as Jan. 14 she would most likely need to begin using “extraordinary measures” to prevent the United States from defaulting on its debt.Ms. Yellen issued her warning about the debt limit — which caps the amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations — at a fractious political moment. Republicans are set to take control of Washington next month, and President-elect Donald J. Trump has already called on Congress to abolish the debt limit before he seeks to push through a new round of tax cuts and other spending priorities.The debt limit was suspended in June 2023 after a contentious negotiation over federal spending, work requirements for receiving government benefits and funding for the Internal Revenue Service. That suspension is scheduled to expire on Jan. 2, forcing Treasury to begin using so-called extraordinary measures to allow the federal government to keep paying its bills.Those measures are essentially accounting maneuvers that keep the government from breaching the debt limit. They can include suspending certain types of investments in savings plans for government workers and health plans for retired postal workers.The United States borrows money to pay its bills and obligations, including funding for social safety net programs, interest on the national debt and salaries for members of the armed forces. If the United States is unable to raise the debt limit, it will soon be unable to make many of those payments, including to investors who have bought government debt.“I respectfully urge Congress to act to protect the full faith and credit of the United States,” Ms. Yellen said in a letter on Friday.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Can Wall Street Billionaires Deliver on Trump’s Blue-Collar Promise?

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    The president-elect has named wealthy financiers for key economic positions, raising questions about how much they will follow through on promises to help the working class.When Donald J. Trump first ran for the White House in 2016, his closing campaign advertisement lamented the influence of Wall Street in Washington, flashing ominous images of big banks and the billionaire liberal philanthropist George Soros.Now, as president-elect, Mr. Trump has tapped two denizens of Wall Street to run his economic agenda. Scott Bessent, who invested money for Mr. Soros for more than a decade, is his pick for Treasury secretary, and Howard Lutnick, the chief executive of Cantor Fitzgerald, will be nominated to lead the Commerce Department. Mr. Trump’s choices to lead his economic team show the prominence of billionaire investors in setting an agenda that is supposed to fuel a “blue-collar boom” but that skeptics think will mostly benefit the rich.As Mr. Trump prepares to assume the presidency in January, business owners and investors are closely attuned to which of his economic promises he will ultimately follow through on. He has promised to slash tax rates, impose hefty tariffs on China and other countries, and deport millions of immigrants who work in American farms and businesses.The selections of Mr. Bessent and Mr. Lutnick cement a hold by Wall Street executives over the two most important economic posts in any administration. The picks are drawing blowback from Democrats and left-leaning groups, who assailed Mr. Trump for giving top jobs to rich donors and suggested that they would soon be working to create new tax breaks for the rich, not those who are struggling.“For all his talk of looking out for working-class Americans, President-elect Trump’s choice of a billionaire hedge fund manager to lead the Treasury Department shows he just wants to keep a rigged system that only works for big corporations and the very wealthy,” said Tony Carrk, the executive director of the government watchdog group Accountable.US.Yet the decision to tap Mr. Bessent and Mr. Lutnick is raising speculation that Mr. Trump could take a more market-friendly approach to many of his economic policies than some had feared because of his professed love of tariffs, which had the potential for igniting a global trade war.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    After Flurry of Cabinet Picks, Trump Rethinks Candidates for Treasury Secretary

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    President-elect Donald J. Trump is expected to invite the contenders for the role, including Kevin Warsh and Marc Rowan, to Mar-a-Lago this week.President-elect Donald J. Trump is eyeing a new candidate for Treasury Secretary amid internal debate over who should have the role: the former Federal Reserve governor Kevin Warsh.Mr. Trump is also considering the Wall Street billionaire Marc Rowan.Mr. Trump had been expected to pick either Howard Lutnick, the chief executive of the Wall Street firm Cantor Fitzgerald, or Scott Bessent, the founder of the investment firm Key Square Capital Management and a former money manager for George Soros. And he had been seen as likely to make the selection late last week.But he has been having second thoughts about the top two candidates, and has slowed down his selection process. He is expected to invite the contenders to interview with him this week at Mar-a-Lago.Mr. Lutnick, who has been running Mr. Trump’s transition operation, has gotten on Mr. Trump’s nerves lately. Mr. Trump has privately expressed frustration that Mr. Lutnick has been hanging around him too much and that he has been manipulating the transition process for his own ends. A person familiar with the process, who spoke on condition of anonymity, described the battle between Mr. Lutnick and Mr. Bessent as a knife fight, with Mr. Lutnick as the primary aggressor.Mr. Bessent is said to still be under consideration, and has also been raised by people in Mr. Trump’s economic circles as a possible contender to lead the White House’s National Economic Council. Elon Musk, a close adviser to the president-elect, on Sunday called Mr. Bessent a “business-as-usual” choice for Treasury secretary in a post on his social media platform, X, while throwing his support behind Mr. Lutnick.Mr. Trump and Mr. Lutnick met on Sunday, and it wasn’t immediately clear what came of the discussion, according to two people briefed on the matter, who spoke on condition of anonymity to discuss personnel matters. Mr. Bessent has also met with Mr. Trump. The other two — as well as any other new names that emerge — are likely to be asked to meet with Mr. Trump this week, according to one of the people briefed on the matter.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How Elon Musk Might Use His Pull With Trump to Help Tesla

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    Although Donald Trump has opposed policies that favor electric cars, if he becomes president he could ease regulatory scrutiny of Tesla or protect lucrative credits and subsidies.Former President Donald J. Trump has promised, if he is re-elected, to do away with Biden administration policies that encourage the use and production of electric cars. Yet one of his biggest supporters is Elon Musk, the chief executive of Tesla, which makes nearly half the electric vehicles sold in the United States.Whether or not Mr. Trump would carry out his threats against battery-powered cars and trucks, a second Trump administration could still be good for Tesla and Mr. Musk, auto and political experts say.Mr. Musk has spent more than $75 million to support the Trump campaign and is running a get-out-the-vote effort on the former president’s behalf in Pennsylvania. That will almost surely earn Mr. Musk the kind of access he would need to promote Tesla.But Mr. Musk would also have to confront a big gap between his Washington wish list and Mr. Trump’s agenda.While Mr. Musk rarely acknowledges it, Tesla has collected billions of dollars from programs championed by Democrats like President Biden that Mr. Trump and other Republicans have vowed to dismantle.In Michigan, a battleground state and home to many auto factories, the Trump campaign has run ads that claim that Vice President Kamala Harris, the Democratic presidential nominee, wants to “end all gas-powered cars” — a position that she does not hold.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Raises New Concerns Over Chinese Lending Practices

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    A Treasury official will call for greater transparency over emergency currency “swap” loans to struggling countries by China’s central bank.The United States is raising new concerns about China’s practice of making emergency loans to debt-ridden countries, warning that a lack of transparency surrounding such financing can mask the fiscal predicaments facing fragile economies that have turned to China for help.A senior Treasury official, Brent Neiman, publicly aired concerns about the practice in a speech on Tuesday in which he urged the International Monetary Fund to push China for greater clarity about its lending terms. The Biden administration broached the issue directly with Chinese officials in Washington this year during a meeting of a recently created bilateral economic and financial working group.Chinese loans to countries already struggling to repay their debts are being made through China’s central bank using so-called swap agreements. These agreements allow countries to borrow Chinese renminbi and keep those funds in their central reserves while using the U.S. dollars that they hold to repay foreign debts.The financing is essentially a line of credit, in which a country swaps its own currency for renminbi and agrees to pay Beijing a high interest rate. The arrangement allows those countries to use their dollar reserves to finance trade or other government needs. They can also use the funds to pay debts owed to Chinese banks or to make purchases from China, creating even deeper ties to its economy.China has provided more than $200 billion in emergency financing in recent years. Chinese state media reported this year that the central bank had 31 currency swap agreements in force worth a combined $586 billion. Chinese currency loans tend to come with higher interest rates than those offered by the Federal Reserve or the I.M.F.Such currency loans do not always appear on the balance sheet of the borrowing nation, obscuring the extent of its liabilities. That lack of information can make it harder for other investors to know how deeply in debt a country is and has fueled criticism that the Chinese loans could leave the recipients worse off.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Officials to Visit China for Economic Talks as Trade Tensions Rise

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    The recently established U.S.-China Financial Working Group is set to meet for discussions about financial stability and curbing the flow of fentanyl.A group of senior Biden administration officials is traveling to Shanghai this week for a round of high-level meetings intended to keep the economic relationship between the United States and China on stable footing amid mounting trade tensions between the two countries.The talks will take place on Thursday and Friday and are being convened through the U.S.-China Financial Working Group, which was created last year. Officials are expected to discuss ways to maintain economic and financial stability, capital markets and efforts to curb the flow of fentanyl into the United States.Although communication between the United States and China has improved over the past year, the economic relationship remains fraught because of disagreements over industrial policy and China’s dominance over green energy technology. The Biden administration imposed new tariffs in May on an array of Chinese imports, including electric vehicles, solar cells, semiconductors and advanced batteries. The United States is also restricting American investments in Chinese sectors that policymakers believe could threaten national security.The U.S. delegation, which is scheduled to depart on Monday, is being led by Brent Neiman, the Treasury Department’s assistant secretary for international finance. He will be joined by officials from the Federal Reserve and the Securities and Exchange Commission. They are expected to meet with the People’s Bank of China’s deputy governor, Xuan Changneng, and other senior Chinese officials.“We intend for this F.W.G. meeting to include conversations on financial stability, issues related to cross-border data, lending and payments, private-sector efforts to advance transition finance, and concrete steps we can take to improve communication in the event of financial stress,” Mr. Neiman said ahead of the trip, referring to the abbreviation for the financial working group.Treasury Secretary Janet L. Yellen pressed Chinese officials during her trip to China in April to stop flooding global markets with cheap clean-energy products.Pool photo by Tatan SyuflanaAmerican and Chinese financial regulators have been conducting financial shock exercises this year to coordinate their responses in the event of a crisis, like a cyberattack or climate disaster, that might affect the international banking or insurance systems.The Biden administration has been urging China to take action to prevent chemicals used to produce fentanyl from being exported to other countries and smuggled into the United States. There were signs of progress this month when China announced that it would put new restrictions on three of these chemicals, a move that the United States described as a “valuable step forward.”Other economic issues between the two countries continue to be contentious. Treasury Secretary Janet L. Yellen pressed Chinese officials during her trip to China in April to stop flooding global markets with cheap clean-energy products, warning that its excess industrial capacity would distort global supply chains.But after a meeting of Communist Party leaders last month, there was little indication that China would retreat from its investments in high-tech manufacturing or take major steps toward rebalancing its economy by bolstering domestic consumption.The talks this week are the fifth meeting of the financial working group and will be the second time the officials have convened in China. More