“Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,” Treasury Secretary Janet Yellen said in a letter to House and Senate leaders.
WASHINGTON — Treasury Secretary Janet Yellen notified Congress on Friday that the U.S. is projected to reach its debt limit on Thursday and will then resort to In a letter to House and Senate leaders, Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation’s $31.4 trillion borrowing authority or suspend it again for a period of time. But she said it’s “critical that Congress act in a timely manner.
In this new Congress, the debt ceiling debate will almost certainly trigger a political showdown between newly empowered GOP lawmakers who now control the House and want to cut spending and President Joe Biden and Democratic lawmakers, who had enjoyed one-party control of Washington for the past two years.
House Republican leaders liken the debt ceiling to a credit card limit and have said they would only raise the statutory ceiling if doing so also secures a spending overhaul. Senate Majority Leader Chuck Schumer and new House Democratic leader Hakeem Jeffries said in a joint statement Friday that “a default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America’s working families on everything from mortgages and car loans to credit card interest rates.”
Shai Akabas, director of economic policy at the Bipartisan Policy Center, told reporters Friday that “this is not the time for panic, but it’s certainly a time for policymakers to begin negotiations in earnest.”
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