US Treasury Secretary Janet Yellen informed Congress on Friday that the United States will reach the so-called “debt ceiling”, which is the maximum amount of money that the government can borrow to finance its activities, next Thursday.
Yellen said in a letter to leaders of the House and Senate that if the cap is raised, “extraordinary measures” will be needed to avoid default and urged lawmakers to move quickly to raise the cap.
In the United States, the maximum amount that the government can borrow to finance its expenditures is set by an act of Congress. When the number approaches, as it has done on average more than once a year for the past 50 years, Congress agrees to raise the cap. Once the cap is reached, the Treasury can no longer issue new debt to fund the payments, with potentially catastrophic consequences for the United States and the global economy as a whole. Raising the debt ceiling is usually a routine bipartisan process, but during Biden’s presidency, it really happened that the Republicans They opposed for reasons of political expediency.
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