US Treasury Secretary Janet Yellen on Friday extended the deadline to raise the federal debt limitsaying the government could default on its debt as early as June 5 without raising the ceiling of $31.4 trillion. Previously, Yellen had set that date for early June, or even June 1.
against the clock
US House Speaker Kevin McCarthy said Friday that progress had been made in negotiations held on Thursday night. with the aim of reaching an agreement to raise the federal government’s debt ceiling, set at US$31.4 trillion.
Separately, Treasury Assistant Secretary Wally Adeyemo said that President Joe Biden will not use the 14th Amendment to unilaterally raise the debt ceilingmarking the most explicit rejection of the proposal by the government.
This was announced on CNN this morning, when asked if Biden would consider using the 14th Amendment to increase the debt ceiling if the country approaches default without a bipartisan agreement. “I think the president and the secretary were very clear that that won’t solve our problems now. So, yes, that’s a no.”Adeyemo said.
He added that the only way forward is for Congress to raise the debt ceiling. “We don’t have a Plan B that allows us to honor the commitments we’ve made to our creditors, to our elders, to our veterans, to the American people,” Adeyemo said.
“The only plan we have is the one that has worked for over 200 years in this country, which is that the United States of America has to pay all its bills and pay them on time,” he closed.
Negotiators appeared close to an agreement to raise the cap for two years and cap spending.with an agreement on funding the Internal Revenue Service and the military while limiting spending on many government programs, according to an official.
However, a government source familiar with the talks he said could easily drag on into the weekend.
The two sides remained at odds over Republican pressure for new labor requirements for some anti-poverty programs.
If Congress fails to raise the debt ceiling next week, it could trigger a default that would rock financial markets and plunge the United States into a deep recession.
“We know it’s crunch time,” McCarthy told reporters on Capitol Hill on Friday. “We’re not just trying to get a deal, we’re trying to get something that’s worthy of the American people, that’s going to change the trajectory.”