US Treasury Secretary Janet Yellen announced that there is still uncertainty about when the liquidity needed to pay the government’s debt will run out, but she will keep Congress informed of any change in the date, which could be June 1.
Yellen told Bloomberg TV that she will meet with senior bankers on Wall Street to talk about the debt ceiling next week, and she thought it appropriate for them to talk about how the debt ceiling controversy affects the US economy.
And she stressed that the failure of Congress to raise the debt ceiling of $ 31.4 trillion will lead to an economic and financial disaster, in her speech on the sidelines of a meeting of finance ministers of the Group of Seven countries in Japan.
She told lawmakers last week that the Treasury Department would not be able to pay all of the government’s bills by June 1 if the federal debt ceiling was not raised.
And the dispute continues between President Joe Biden and his Democratic Party, and the Republicans who control the House of Representatives, over the need to raise the debt ceiling, which reflects federal funds that have already been spent.
--Biden insists that Congress has a constitutional duty to raise the debt ceiling without conditions, while Republicans insist that any raise be linked to sweeping budget cuts.
Unlike most developed countries, the United States has a cap on borrowing and legislators must periodically raise this cap because the government spends more than it earns.
Yellen deflected the question of whether the Treasury Department would continue to make payments for the securities if the debt ceiling was exceeded — a possibility raised during an earlier discussion of the debt ceiling. She said there was no good option but for Congress to raise the debt ceiling, as it has done nearly 80 times since 1960.
She indicated that the Treasury Department may be able to provide more accurate clarifications about the exact time when the liquidity needed to pay the government bills will run out as the date approaches.
