Saturday, June 3, 2023

They warn that the United States may fall into default in a month: they call for raising the debt limit

US Treasury Secretary Janet Yellen warned that the country could fall into default within a month if adequate measures were not taken. In this sense, he assured that the loan limit should be increased to avoid non-payment.

United States Secretary of the Treasury, Janet Yellen warned on Monday that The country could default on its national debt on June 1 and urged Congress to pass a suspension of the debt ceiling as soon as possible.

In a letter to the Speaker of the House of Representatives, Republican Kevin McCarthy, the secretary predicted that the executive would not be able to meet its governmental obligations. “Early June, potentially June 1, if Congress doesn’t raise or suspend the debt ceiling before then.”

Yellen stressed that, given these forecasts, it is “imperative” that Congress act as soon as possible to guarantee certainty over the long term that the government will be able to continue counting money to meet payments. .

The Treasury Representative sent a similar letter to Hakeem Jeffries, the leader of the Democrats in the lower house, among others; the leader of the Senate, Chuck Schumer, also a Democrat; and conservative Mitch McConnell, the main Republican opposition figure in that chamber.

“We don’t have the luxury of waiting until June 1st to come together, pass a clean bill to stop the default and avoid catastrophic consequences for our economy and millions of American families.”Schumer and Jefferies said in a joint statement.

The time has come, he said, “to leave behind partisan interests and do what is right and necessary for the American people.”

The current debt ceiling is $31.4 trillion and was reached on 19 January, On the same day, the Treasury activated “extraordinary measures” to pay the bills, but already insisted that the use of these special financial instruments should be extended only until 5 June.

raise the US debt ceiling

The Republican-majority House of Representatives approved a bill on April 26 to raise the debt ceiling in exchange for drastic cuts in public spending, but that initiative has little chance of success because Democrats hold a majority in the Senate and the White House Has warned that the President, Joe Biden, will veto it upon reaching office.

“Democrats have no more excuses for obstruction. It’s time to sit down and have a conversation.”The Republican National Committee said in another statement.

Yellen warned that similar situations in the past have shown that “Waiting until the last minute to suspend or raise debt limits could seriously damage business and consumer confidence, increase short-term borrowing costs for taxpayers, and negatively impact America’s credit rating.” can affect.”

Following his message, Biden called McCarthy to a meeting at the White House on May 9.

The United States has never had to declare default on its national debt, but from time to time sees that possibility because, unlike other countries, its government It can issue debt only up to the limit set by Congress, which has the power to increase that limit as it sees fit.

World Nation News Desk
World Nation News Desk
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