Treasury secretary warns of risk of default in June if debt ceiling is not raised

of U.S. Treasury Secretary Janet Yellen Believes it is ‘very likely’ that the country will not meet its targets payment obligation If Congress does not raise or suspend the borrowing limit, it will start in early June.

“Unless Congress moves to raise or suspend the debt ceiling by early June, and possibly as early as June 1, it is very likely that the Treasury Department will not be able to continue to meet all of its government obligations. High, we estimate,” Yellen warned in a letter to her. Speaker of the House Kevin McCarthy.

In this sense, the report recalls that the stalemate so far in negotiations on the debt ceiling meant waiting until the last moment to suspend or raise it. Doing so may seriously damage the credibility of your company or family. Similarly, short-term funding costs will increase, adversely affecting US “ratings.”

“If Congress fails to raise the debt ceiling, it will cause serious hardship for families, damage global leadership, and call into question our ability to defend our national security interests,” it added. .

This country has never defaulted on its national debt, However, unlike other countries, the executive branch can only issue debt up to a limit set by Congress, and Congress has the power to suspend that limit if necessary, so this possibility is occasionally appear.

The current cap of $31.4 trillion was reached in January last year. The government is currently drawing down reserves to pay off debt owed, but the Treasury Department expects the reserves to run out on June 1, at which point the U.S. will default. there is

With the Republican Party trying to impose a debt ceiling in exchange for spending cuts and negotiations stalling, Mr Biden said he wanted to return to Washington sooner to continue negotiations in Australia after the G7 summit in Japan. and decided to cancel their visit to New Zealand. Democrats don’t want to tie them together.