If the debt ceiling is not raised or suspended by Congress before the current one runs out, the government risks defaulting on its payment obligations, with profound implications for the economy.
The United States could enter default at the beginning of June, assured this Monday Treasury Secretary Janet Yellen while politicians wrestle over the increase in the limit of the government’s indebtedness.
Last week, Republicans voted to raise the national debt limit but with drastic budget cuts, as they sought to confront the Democratic president. Joe Biden for “excessive” spending.
Although the United States reached its debt limit of $31.4 trillion in January, the Treasury took extraordinary measures that allow it to continue financing government activities.
If the debt ceiling is not raised or suspended by Congress before the current one is exhausted, the government risks defaulting on its payment obligations, with profound implications for the economy.
“Our best estimate is that we will be unable to continue to meet all government obligations in early June, and potentially as soon as June 1, if Congress does not raise or suspend the debt limit before then.”Yellen said in a letter to the Speaker of the House of Representatives, Kevin McCarthy.
“Given current prospects, it is imperative that Congress act as soon as possible to raise or suspend the debt limit to provide longer-term certainty that the government will continue to meet its payments,” Yellen said.