The US has officially reached its debt ceiling, given the obstructionist approach of opposition Republicans in Congress. US Treasury Secretary Janet Yellen wrote to leaders today that she has taken “extraordinary steps” to prevent the country from defaulting. These measures affect the pension fund of public servants and postal workers.
Yellen warned that Congress must “act quickly” because such measures could avoid default by only a few months. The finance minister last week called on MPs to raise or suspend the current debt ceiling of $31.38 trillion. He warned that a default would cause “irreparable damage” to the U.S. economy, American citizens and global financial stability. According to estimates, the US will be bankrupt by summer.
Under presidents of both parties — and with bipartisan majorities — the debt ceiling has been suspended or raised dozens of times over the past few decades. However, some Republican MPs now want to use their deal to raise the cap as a bargaining chip to trigger spending cuts.
In November’s midterm elections, Republicans won a narrow majority in the House of Representatives. You can use it to block the legislative efforts of President Joe Biden’s Democrats.
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