US Treasury Secretary Janet Yellen warned, on Monday, that the United States may default on its fiscal bills on June 1 if the two chambers of Congress do not agree to pass a bill to raise the debt ceiling.
Yellen sent a letter to House Speaker Kevin McCarthy asking him to agree on a legislative formula approved by both parties in Congress to avoid a major economic disaster and to pass the bill before the beginning of next month.
Last week, House Republicans voted in favor of a plan to raise the national borrowing ceiling along with drastic spending cuts, in the midst of a showdown with Democratic President Joe Biden over “excessive” public spending.
The United States reached its borrowing ceiling of $31.4 trillion in January, and the Treasury Department took extraordinary measures to allow it to continue financing state activities.
But if Congress does not raise or suspend the debt ceiling before the extraordinary tools are exhausted, the country will risk defaulting on its obligations, with dire repercussions for the economy.
“Our best estimate is that we will be unable to continue to meet all of the government’s obligations by early June, possibly as early as June 1, if Congress does not raise or suspend the debt ceiling before that date,” Yellen said in a letter to Republican House Speaker Kevin McCarthy.
“Given the current outlook, it is imperative that Congress move as quickly as possible to increase or suspend the debt ceiling in a manner that provides long-term certainty that the government will continue to make payments,” she added.
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2023-05-01 21:09:18
