WASHINGTON – Secretary of the Treasury, Janet Yellenhe reiterated on Monday that the United States may not be able to pay its bills as early as June 1, an announcement that keeps pressure on the White House and congressional leaders as they negotiate how to raise the nation’s debt limit.
The warning to Congress comes when the president Joe Biden and the Speaker of the House of Representatives kevin mccarthy They were due to meet at the White House on Monday to try to resolve the impasse.
Representatives for Biden and McCarthy discussed last week to come up with a plan to limit federal spending and reduce the deficit, while increase the debt limit of 31.4 trillion dollars.
Yellen warned that the nation’s finances remain in a precarious state, saying she was “most likely“for the United States to stay illiquid in early June, instead of his previous letters, which called that timeline “probable”.
“With an additional week of information now available, I write to note that we estimate it is highly probable that the Treasury will no longer be able to meet all government obligations unless Congress has acted to raise or suspend the due early June, and potentially as soon as June 1,” Yellen wrote.
In her previous letter, published a week ago, Yellen warned that her estimates could be wrong due to the unpredictability of tax revenues.
He said the actual date the Treasury will end the calls extraordinary measures you’re using to delay a default “may be several days or weeks later”.
On Monday, Yellen did not suggest there might be more time and warned that the debt limit would not be raised disastrous for the economy.
“Unless Congress raises the debt limit, it would cause severe hardship for American households, undermine our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen said.
The country’s cash balance is declining dangerously.
Yellen on Sunday dismissed hopes that the so-called extraordinary measures she used to delay a default would be enough to keep the government in place beyond mid-June.
Republicans have refused to raise the debt ceiling without spending cuts, forcing Democrats to the negotiating table to avoid a default that could trigger a recession and financial crisis.
The two sides remain apart on key issues including federal spending limits, new work requirements for some federal poverty alleviation recipients, and funding to help the Internal Revenue Service crack down on tax evasion by big income earners and corporations.
The Treasury secretary said over the weekend that if the debt limit was not raised, the government would be forced to make tough decisions about how to meet the country’s financial obligations.
Payments of benefits to retirees and veterans are likely to be disrupted, and the uncertainty could cause prices to rise. interest rates and a crash in stock prices.
The Biden administration has downplayed the idea that it can ignore the debt limit and keep borrowing by invoking the 14th amendment, which says the validity of US debt will not be challenged.
Though administration lawyers have studied the idea, officials believe the anticipated legal challenges and uncertainty would destabilize markets.
“There can be no acceptable outcomes if the debt ceiling isn’t raised,” Yellen said on the show.meet the presss” on NBC.
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Source: Clarin
Mary Ortiz is a seasoned journalist with a passion for world events. As a writer for News Rebeat, she brings a fresh perspective to the latest global happenings and provides in-depth coverage that offers a deeper understanding of the world around us.