The Secretary of the Treasury USA, Janet Yellenaddressed the leaders of Congress on Monday to warn that if an agreement is not reached to raise the debt ceiling, the possibility that the country will incur a suspension of payments on June 1 has gone from probable to “highly probable”.
His letter is sent the same day that the US president, Joe Biden, and the leader of the House of Representatives, the Republican Kevin McCarthy, are going to resume negotiations in person at the White House.
Apart from McCarthy, Yellen addressed the Democratic leaders in the Lower House, Hakeem Jeffries, and the Senate, Chuck Schumer, as well as the conservative Mitch McConnell, the main figure of the Republican opposition in the Upper House.
On May 15, Yellen warned them that it was “likely” that the Treasury would no longer be able to meet its government obligations on June 1 if the sovereign debt limit was not raised or suspended.
This Monday, with the new data available this week, the head of the Treasury stressed in her new letter that this possibility is now “highly probable”.
Yellen asked lawmakers not to wait “until the last minute” to reach a solution, because doing so “can cause serious damage to business and consumer confidence”in addition to having a negative impact on the credit ratio of the United States.
The country has never defaulted on its national debt, but from time to time it looks at that possibility, since, unlike other nations, its Executive branch can only issue debt up to the limit established by Congress, which has the power to suspend that roof as it sees fit.
The current limit, of 31.4 trillion dollars, was reached last January. The government is currently drawing on money in its reserves to pay off the debt it has contracted, but the Treasury Department estimates that those reserves will run out on June 1, at which time the US would go into default.
Biden decided to suspend the trip he planned to make to Australia and New Zealand after the G7 summit in Japan to be able to return to Washington sooner and continue the negotiations, stalled because the Republicans intend to make the debt ceiling conditional on spending cuts while the Democrats they don’t want to link them.
Source: EFE
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
