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.
US Treasury Secretary Janet Yellen warned Monday that the United States is at risk of defaulting on its debts as of the beginning of June, amid a dispute between Republicans and Democrats over raising the borrowing ceiling.
Last week, House Republicans voted in favor of a plan to raise the national borrowing cap along with drastic spending cuts, in the midst of a showdown with Democratic President Joe Biden over “excessive” public spending.
The United States reached the borrowing ceiling of $ 31.4 trillion in January, and the Treasury Department took exceptional measures that 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.
