US Treasury Secretary Janet Yellen, 76, has warned Congress that the government could default if the debt limit is not temporarily raised or suspended.
It is “critical that Congress act in a timely manner to raise or suspend the debt ceiling,” Yellen wrote in a letter to party leaders from both houses of parliament. White House spokeswoman Karine Jean-Pierre, 48, warned Congress that raising the debt ceiling was non-negotiable.
“Irreparable damage” to global financial stability is imminent
Yellen warned that defaulting on debt would cause “irreparable damage” to the US economy, the livelihoods of all US citizens and global financial stability. Accordingly, the United States will hit the debt ceiling next Thursday.
In this case, Yellen announced that her ministry would have to take “extraordinary measures” to prevent the United States from going bankrupt. However, such measures could delay the problem for up to six months, she warned.
Jean-Pierre stressed that the White House “will not enter into negotiations” on the issue. There has always been bipartisan cooperation in raising the debt ceiling “and that’s how it should be,” she said. “It should not be a political game ball.”
Bankruptcy threatens again and again
The debt limit has been suspended or raised dozens of times in recent decades by presidents of both parties – and by bipartisan majorities.
However, some Republican lawmakers want to use their agreement to raise the limit as a bargaining chip to push through cuts. In the November midterm elections, Republicans won a narrow majority in the House of Representatives.
If the Senate, controlled by the Democratic Party, and the House of Representatives, controlled by the Republican Party, cannot reach an agreement, the world’s largest economy is on the verge of bankruptcy. (AFP/euc)