uS Finance Minister Janet Yellen has warned Congress of an impending government default unless the debt ceiling is temporarily raised or suspended. It is “crucial that Congress acts in good time to raise or suspend the debt ceiling,” Yellen wrote in a letter to the party leaders of both houses of parliament. White House spokeswoman Karine Jean-Pierre warned Congress that raising the debt ceiling was non-negotiable.
Yellen warned that defaulting on debt would cause “irreparable damage” to the US economy, the livelihoods of all US citizens and global financial stability. Accordingly, they reach USA the debt ceiling next Thursday.
problem just postponed
In that case, Yellen announced that her ministry would have to take “extraordinary measures” to avoid US default. However, such measures could postpone the problem for a maximum of six months, she warned.
Jean Pierre stressed that the White House “will not conduct any negotiations” on the issue. There has always been bipartisan cooperation on raising the debt ceiling, “and that’s the way it should be,” she said. “It shouldn’t be a political pawn.”
The debt limit has been suspended or raised dozens of times by presidents of both parties in the past few decades – and with cross-party majorities.
However, some Republican MPs want to use their agreement to raise the cap as a bargaining chip to push through spending cuts. In the midterm elections in November, the Republicans won a narrow majority in the House of Representatives.
If the Democratic Party-controlled Senate and Republican-controlled House of Representatives cannot come to an agreement, the world’s largest economy could face insolvency.