The US has officially reached the debt ceiling in view of the blocking attitude of the Republican opposition in Congress. US Treasury Secretary Janet Yellen wrote to leaders today that she has taken “extraordinary measures” to prevent the country from defaulting. The measures affect pension funds for civil servants and postal workers.
Yellen warned that since such measures could only prevent a default for a few months, Congress must “move quickly.” The finance minister asked lawmakers last week to raise or lift the current $31.38 trillion debt limit. She warned that a debt default would cause “irreparable damage” to the US economy, American citizens and global financial stability. According to estimates, the US may become insolvent in the summer.
Tactical Negotiations
The debt ceiling had been lifted or raised dozens of times under presidents of both parties in recent decades – and with bipartisan majorities. However, some Republican lawmakers now want to use their deal to raise the cap as a bargaining chip to force spending cuts.
In the November elections, Republicans won a narrow majority in the House of Representatives. You can use it to block legislative initiatives by President Joe Biden’s Democrats.