Goldman with the note:
Treasury Secretary Yellen sent a letter to congressional leaders this morning (Sep. 8) indicating that the the Treasury will exhaust its cash and extraordinary measures “during the month of October”. This is in line with our expectations, though slightly sooner than the “October or November” timing that the Congressional Budget Office had estimated in a report in late July.
There are several ways the debt limit could play out. The most likely scenario is that Democratic leaders will attach a debt limit suspension to upcoming spending legislation to keep the federal government open past the end of the fiscal year (a “continuing resolution”) and to provide emergency disaster relief funding related to the fires in the Western US and storm damage in the East and South. As 46 Senate Republicans have indicated they will block a debt limit increase, there is a good chance this strategy will not succeed. That said, passage of short-term debt limit might be possible as several Republican senators represent states affected by recent disasters. One option Republicans might consider would be to vote against the bill but decline to filibuster it, allowing it to pass with only 51 votes in the Senate. This would likely require unanimous Democratic support in that chamber, which is possible but not certain.
