1970-01-01 02:00:00
The United States is giving itself a little more time to negotiate the debt ceiling and avoid default. According to the latest estimate of the US Treasury, in the absence of a political agreement, the ‘default’ could happen on June 5th. President Joe Biden declared on Friday (26) that he is “hopeful” that an agreement to raise the country’s debt ceiling will be reached in the coming hours.
The United States is giving itself a little more time to negotiate the debt ceiling and avoid default. According to the latest estimate of the US Treasury, in the absence of a political agreement, the ‘default’ could happen on June 5th. President Joe Biden declared on Friday (26) that he is “hopeful” that an agreement to raise the country’s debt ceiling will be reached in the coming hours.
Guillaume Naudincorrespondent of RFI em Washington
“It’s very close and I’m optimistic,” the US president told reporters at the White House. “I’m hopeful that tonight [de sexta-feira] let’s see if we will be able to reach an agreement”, he pointed out. it would prevent the world’s largest economy from being unable to honor its commitments and going into default.
This is the strongest indication yet that the Republican and Democratic leadership will reach an understanding that will allow the government to issue debt, obtain financing and avoid a default that could lead to a recession and job losses.
The information about the new deadline was passed by the Secretary of the Treasury, Janet Yellen, in a letter to the American legislators. Using extraordinary measures, ie ‘scraping the bottom of the coffers’, the department found a way to pay the federal government’s bills for four more days.
“Based on the most recent data available, we now estimate that the Treasury will not have sufficient resources to meet government obligations if Congress does not raise or suspend the debt ceiling by June 5,” Yellen detailed.
dangerously thin mattress
But the mattress is getting dangerously thin. On Thursday (25), the reserves totaled less than US$ 40 billion. Incidentally, that means that about 30 individuals in the world are currently richer than the US Treasury.
Even if it’s only four extra days, the time frame can be a lot. Negotiations between the White House and House Republicans progressed. The administration apparently agreed to reverse-fund tax audits of the richest to transfer them to welfare.
According to information from the American press, which has not been confirmed, the agreement that is in the pipeline would allow an episode similar to the current one not to happen before the presidential elections next year.
On Thursday, Republican House Speaker Kevin McCarthy told reporters that negotiators had “made progress” but added: “Nothing is agreed until everything is agreed.”
Trumpist
But there are sticking points in the negotiations. In particular about the conditions required to receive certain medical aids. Joe Biden refuses to allow the most modest to be deprived of this benefit, when Republicans want to impose very strict labor obligations.
In addition, there is the intransigence of the most extreme Republicans, the most Trumpists. They are not prepared for many concessions and, for now, their approval is essential to reach an agreement that avoids the first default in the country’s history.
With that, the managing director of the International Monetary Fund, Kristalina Georgieva, asked that a solution be reached “as soon as possible”. “Experience shows us that you have to go almost to the limit to find a solution,” she revealed at a press conference.
“Finishing with a positive result is paramount from a global point of view”, added the Bulgarian economist when presenting a report that modified from 1.6% to 1.7% the economic growth forecast for the United States this year.
Memorial Day
Since Monday is the Memorial Day holiday, members of Congress left Washington for ten days. And, to the dismay of Democrats, Biden himself will head to the Camp David official rest residence and then head to his home in Delaware.
Even so, Wally Adeyemo, undersecretary of the Treasury, assured the CNN that both Biden and McCarthy are focused on averting catastrophe. “The president decided, the ‘speaker’ [presidente da Câmara dos Representantes] said: we have to get something before June”, stressed Adeyemo.
(With information from AFP)
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