President Biden and House Speaker Kevin McCarthy are scheduled to meet Tuesday afternoon to discuss budget priorities and raising the debt ceiling in a volatile time.
Lawmakers have less than a month to pass legislation to raise or suspend the debt ceiling, which limits how much the government can borrow. The U.S. reached her $31.4 trillion of statutory debt limit on Jan. 19, and the Treasury Department said the accounting manipulations it had employed to support its cash reserves were also depleted on June 1. It is estimated that there is a possibility that
If the debt ceiling isn’t raised before the government runs out of cash, this is known as X-dating, and all bills, including military salaries, bondholder payments, and social security checks, are left on time. may not be able to pay for Without a solution, millions of Americans could be deprived of government benefits, stock markets crash, and a constitutional crisis ensues.
The Bipartisan Policy Center, a think tank that tracks the country’s cash reserves, warned on Tuesday that the X-date is likely to be sometime between early June and early August. It began to surge and said it would soon become increasingly difficult to meet the country’s financial obligations.
“The next few weeks will be crucial in assessing the strength of the government’s cash flow,” said Shai Aqabath, economic policy director at the Bipartisan Policy Center. “Russian roulette players could play Russian roulette every day with the complete trust and credit of the United States, creating an economic crisis for voters and the country.
With tax revenues pouring into government coffers this spring, defaults could come sooner than expected. The slow pace is due in part to the Internal Revenue Service’s decision to give taxpayers in states affected by the weather more time to file their 2022 taxes.
How brinkmanship will try to prioritize certain payments if the federal government runs out of cash, or how Biden can completely ignore the debt ceiling and order the Treasury to keep borrowing. I have renewed my question about what. Because minting a trillion dollar coin could actually be feasible.
Treasury Secretary Janet L. Yellen said Monday that Biden must decide how to proceed if the debt ceiling is not raised.
“If Congress doesn’t raise the debt ceiling, I think the president needs to make some decision about what to do with the resources we have,” Yellen told CNBC. “And there are many different options, but no good ones.”
She added that failing to raise or suspend the debt ceiling would be an “economic catastrophe” and attacked Republicans for holding the economy hostage.
“This is a gun aimed at the head of the American people and the American economy,” Yellen said.
Biden and McCarthy will be joined by Majority Leader Senator Chuck Schumer (New York) and Minority Leader Senator Mitch McConnell (Kentucky). Yellen will travel to Japan on Tuesday for a meeting of G7 finance ministers and will not attend the meeting at the White House.
The Biden administration and lawmakers are under pressure from business groups to find ways to avoid a default.
“Debt defaults will severely hurt the economy, leading to widespread unemployment, reduced retirement savings and higher borrowing costs for families, businesses and governments,” said Joshua Bolten, CEO of the Business Roundtable. said. “Failure to raise the debt ceiling will threaten the central role of the US dollar in the global financial system and will benefit China.”
“Securing a bipartisan path to raising the debt ceiling has never been more urgent.”
