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US: Yellen calls for swift action on debt ceiling

US: Yellen calls for swift action on debt ceiling

US Treasury Secretary Janet Yellen has warned of economic “catastrophe” if the US debt ceiling is not raised soon or suspended. “America has paid its bills on time since 1789, and I believe it will continue to do so,” Yellen told the House Budget Committee today.

Yellen urged members of Congress not to wait until the last minute to suspend or raise rates. In the United States, Congress sets the debt ceiling at irregular intervals to determine how much the state can borrow.

So far the range has been around US$31.4 trillion (€29.75 trillion). Meanwhile, the applicable debt ceiling in the US has been reached and the Treasury Department has to tap reserves – because the US is no longer allowed to borrow any more to pay its bills.

Some Republicans are going to boycott

Among Republicans in the House of Representatives, however, some hardliners are balking at the issue, and there is no sign of an accord with President Joe Biden’s Democrats. The U.S. Congressional Independent Budget Office predicts that the payment default will be immediate between July and September.

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