Friday, June 9, 2023

Yellen pressures US Congress to compromise on debt

US Treasury Secretary, Janet Yellen, addressed Congressional leaders on Monday to warn that if an agreement is not reached to raise the debt ceiling, it is likely that the country will change the suspension of payments on June 1 from probable . “highly probable”.

His letter has been sent on the same day that the US President, Joe Biden, and the leader of the House of Representatives, Republican Kevin McCarthy, are set to resume talks in person at the White House.

In addition to McCarthy, Yellen addressed Democratic leaders in the lower house, Hakeem Jeffries, and the Senate, Chuck Schumer, as well as conservative Mitch McConnell, the main figure in the Republican opposition in the upper house.

On May 15, Yellen warned them that it was “likely” that the Treasury would be unable to meet its government obligations on June 1 if the sovereign debt limit was not raised or suspended.

This Monday, with new data available this week, the head of the Treasury stressed in his new letter that the possibility is now “highly probable”.

Yellen called on lawmakers not to wait “until the last minute” to reach a solution, as doing so “could cause serious damage to business and consumer confidence,” as well as negatively impact the US credit rating Is.

The country has never defaulted on its national debt, but from time to time it sees that possibility because, unlike other nations, its executive branch can issue debt only up to the limits established by Congress, which has that amount. Has the power to suspend the ceiling. as he thinks fit.

The current limit of $31.4 trillion was reached last January. The government is currently drawing on the money in its reserves to pay off the debt it has contracted, but the Treasury Department estimates those reserves will run out on June 1, at which time the US will go into default.

Biden decided to postpone his trip to Australia and New Zealand after the G7 summit in Japan so he could return to Washington sooner and continue talks, as Republicans intend to make the debt ceiling conditional on spending cuts . Democrats they don’t want to link them.

Nation World News Desk
Nation World News Desk
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