If the debt ceiling is not raised, the United States will have exhausted on October 18 all exceptional measures to finance the country's budget, warned Janet Yellen, the Secretary of the Treasury, on Tuesday.

After this date, "we expect that the Treasury will find itself with very limited resources which would run out quickly," warns in a letter to elected officials Joe Biden's Minister of Finance while a standoff is being played out. Congress on the gigantic investment plans proposed by the government.

"Important" consequences

"It is not certain that we can continue to meet all of the nation's commitments," says Jant Yellen.

The government would no longer be able to borrow, pay its bills or pay civil servants' salaries.

With the country already in a similar situation, "we know that waiting until the last minute can seriously damage business and consumer confidence, increase borrowing costs for taxpayers and have a negative impact. on the credit rating of the United States for the years to come ”, also recalls the person in charge.

If the debt ceiling is not quickly raised or suspended, it could also lead to "significant disruption in financial markets," she adds.

Joe Biden's "irresponsible" plans

Democrats have so far linked the suspension of the debt ceiling to passing the federal government's new budget, which Congress normally has until midnight Thursday night to approve if it wants to prevent public funds. are suddenly cut off.

But Republicans adamantly oppose the suspension of the debt ceiling because it would, they say, give Joe Biden carte blanche for his "irresponsible" plans.

A first budget text thus failed in the Senate Monday evening for lack of Republican support.

"America is going to default for the first time in history"

The most likely scenario now is for Democrats to reconsider their copy of removing the debt ceiling suspension from the budget bill, which should garner enough votes to approve a budget extension before Friday.

And that they approve separately, counting on their own votes, a suspension of the debt ceiling.

Speaking to a Senate banking committee on Tuesday, Janet Yellen, Secretary of the Treasury, reiterated her demand: “It is imperative that Congress quickly resolve the debt limit.

If not, America will default for the first time in history, ”she said.

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