US dept is facing a ceiling. Yellen calls on Congress to act.

U.S. Treasury Secretary Janet Yellen has warned that the nation's national debt is facing a ceiling, and has asked Congress to increase the limit or suspend the timing of the statutory ceiling.

 

 

In a letter to Senate and House leadership, Yellen said she would take emergency measures next week to prevent the possibility of an unprecedented default on government debt, saying that if it continues, the national debt will reach its legal limit on August 1. 

 

 

Secretary Yellen feared that if the default were to materialize, she would "irreparably damage the American economy and the livelihoods of all Americans."

 

In 2019, under former President Donald Trump, the White House and Congress agreed to a two-year waiver until July 31, 2021, when the government debt ceiling will be applied.

 

 

 

 

Its current debt is $23.4 trillion.

 

In particular, Yellen mentioned a case in which the rating agency Standard & Poor's (S&P) downgraded the US credit rating in 2011.

 

At the time, Republicans and Democrats dramatically agreed to suspend the debt ceiling, but S&P caused an unprecedented stigma in America for having a default crisis.

 

Again, the two parties are engaged in a tug-of-war.

 

Republican Senate Minority Leader Mitch McConnell has warned that all Republican senators will vote against the increase in the debt limit in protest against President Joe Biden's wealth tax hike.