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The US government is nearing its debt ceiling. If Congress doesn’t raise the limit on federal loans, the government is expected to run out of money by Oct. 18, the US Treasury Secretary warned. “It is uncertain whether we can continue to meet all of the country’s obligations after that date,” said Janet Yellen.
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Source: BELGIAN
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Republicans in the US Senate have so far refused to support an increase or suspension of the debt ceiling, even though they had urged it under their party’s former president, Donald Trump. On Monday, a Democratic attempt to pass a 14-month suspension was blocked, along with a temporary budget.
Without an increase in the debt ceiling, the government would be unable to pay civil servants’ salaries, make payments to retirees, or pay the debts. Yellen again warned that swift approval for raising the cap is critical, because “waiting until the last minute could seriously damage business and consumer confidence, increase borrowing costs for taxpayers and increase the creditworthiness of the United States for the coming years.” years can be negatively impacted”.
She also warned about the impact on the financial markets if clarity is not immediately provided. Increased uncertainty could cause major market volatility and erode investor confidence, she said. Raising the debt cap will not increase spending, but will only allow the Department to fund projects that have already been approved by Congress.
Republican Senate Leader Mitch McConnell is using the debt cap as a political weapon to protest President Joe Biden’s spending plans. Under Trump, the debt ceiling was suspended for two years with the approval of both parties. McConnell argued at the time that failing to do so would be “a disaster”. The debt ceiling was reset on August 1, when the US debt stood at $28.4 trillion.
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