Tuesday, February 7, 2023

US: Treasury took “extraordinary measures” on debt

WASHINGTON ( Associated Press) – The countdown to a possible US government debt default is about to begin, and friction between President Joe Biden and Republican lawmakers is fueling fears that the country will be able to overcome a potential economic crisis.

The Treasury Department said in a letter to legislative heads on Thursday that it has begun taking “extraordinary measures” as the government nears the limit of its statutory borrowing capacity of $38.381 trillion. The artificially imposed debt ceiling has been increased almost 80 times since the 1960s.

So far markets are calm as the government may resort to an accounting maneuver to stay open for now, and any threat to the economy will be many months away. Many analysts, despite their fears, assume that the deal will happen.

But this moment seems more tense than previous similar occasions because of major differences between Biden and the new Speaker of the House of Representatives, Kevin McCarthy, who heads a strong Republican caucus.

These differences raise the risk that the government could default on its fiscal obligations for political reasons, a problem that would roil financial markets and, if not resolved, could plunge the world’s largest economy into an entirely avoidable recession. .

The couple have several months to strike a deal while the Treasury implements its “extraordinary measures” to keep the government running until at least June. But years of partisan animosity have led to conflicting demands that threaten lawmakers’ ability to work together and fulfill a fundamental duty.

Biden insists on a cap increase to meet existing fiscal obligations, refusing to even talk to Republicans. McCarthy called for talks that he believed would cut spending. It is unclear how much he wants to cut and whether his fellow Republicans will accept any deal after a contentious start to the session that required 15 rounds of voting to elect McCarthy as speaker.

Asked twice on Wednesday if there was any indication that Republican lawmakers could ensure a default could be avoided, White House press secretary Karine Jean-Pierre said it was her “constitutional duty” to protect the goodwill and reputation of the country. responsibility”. He did not clarify whether the presidency sees signs at this point that the threat of default has disappeared.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news