The United States could default on its debt as early as June, the Treasury secretary said Monday. Janet Yellenas politicians tussle over raising the government’s borrowing limit.
Last week, Republicans voted to raise the national borrowing limitbut with drastic budget cuts, while seeking 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 Treasure it 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 runs out, the US 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,” he said. Yellen in a letter to House Speaker 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.
kg
