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According to Treasury Secretary Janet Yellen, the United States is threatened with bankruptcy in early June. Yellen wrote to the leader of the Republican majority in the House of Representatives that unless Congress raises or suspends the debt ceiling in the coming weeks, the administration will not be able to meet all of its commitments “by early June, possibly by June 1”. Representatives on Monday, Kevin McCarthy and other top politicians. Congress should therefore act as soon as possible.
Republicans and Democrats have been at odds for months over government spending and the country’s debt burden. In mid-January, the United States had officially reached the debt ceiling of $31.38 trillion (about €28.6 trillion). The government has since managed to avoid bankruptcy through a series of “extraordinary measures”. A default would have potentially devastating consequences for the US and international financial system.
Republicans use consent as a bargaining chip
The US debt limit has been suspended or raised dozens of times over the past few decades by the presidents of both parties and by majority of both parties. Republicans now want to use their agreement to raise the cap as a bargaining chip to force spending cuts.
A few days ago, the Republican-dominated House of Representatives passed a bill calling for massive spending cuts in exchange for raising the debt ceiling. Among other things, subsidies and tax credits for renewable energy and the student debt exemption promoted by President Joe Biden will be removed.
(AFP)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
