2023-05-02 06:24:55
The meeting, scheduled to take place on May 9, is “the first sign of progress” in debt ceiling negotiations, according to Bloomberg news agency.
The US is currently allowed to take on 31.4 trillion dollars (28.6 trillion euros) in debt. That ceiling was actually reached in January, but with ‘extraordinary measures’ it was still possible to continue spending money for a while. How long that is still possible is unclear and “difficult to estimate”, but on Monday Yellen said that there may be no more cash as early as June 1. Economists previously thought the US could foot the bill until August.
Yellen therefore called on Congress in a letter on Monday to “take action as soon as possible”. If the debt ceiling is not raised, civil servants can no longer be paid and benefits can no longer be paid. The creditworthiness of the United States will also be at stake. Economists fear it could shake up financial markets.
American media report that the debt ceiling has been raised, extended or revised no less than 78 times since 1960. It has never happened in the country’s more than 200-year history that America could no longer meet its financial obligations, Biden emphasized on Monday.
Republicans voted last week to raise the debt ceiling, but McCarthy countered with a slew of government spending cuts. Biden refused to agree to this, because the cuts would make some of his policy plans impossible.
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