China News Network, May 5 Comprehensive US media reported that on May 2, local time, US Treasury Secretary Yellen issued a warning that if Congress cannot solve the debt ceiling problem, the United States may default on its debt as early as June 5.
Infographic: U.S. Treasury Secretary Janet Yellen. Photo by Zhang Weiran, reporter of China News Agency
According to reports, Yellen sent a letter to US House Speaker McCarthy and other congressional figures, urging Congress to act as soon as possible to "raise the debt ceiling or temporarily invalidate it." Yellen said she would continue to keep Congress updated in the coming weeks and reiterated that it was "imperative" for lawmakers to begin taking action.
"We know from past debt ceiling standoffs that waiting until the last minute to suspend or raise the debt ceiling can seriously damage business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact U.S. credit ratings." She wrote.
Infographic: US dollars.
In January, when the US federal government debt hit a $1.31 trillion statutory debt ceiling, the US Treasury Department took extraordinary measures to avoid defaulting on the government debt. Although the deadline proposed by Yellen is approaching, the Democratic and Republican parties in the United States are still pulling on this issue.
According to US media reports, the Republican side said that if Democrats do not make compromises in spending and government budget, they will not raise the debt ceiling further; US President Joe Biden, a Democrat, refused to accept a compromise and insisted that no conditions should be attached to raising the debt ceiling.
On April 4, the Republican-controlled House of Representatives narrowly approved the party's Limit, Save and Increase Act. The bill stipulates that the federal government's debt ceiling will be raised by $26.1 trillion; the average annual growth of the federal government's budget must be controlled at 5%; recovery of unspent COVID funds; Cuts to the IRS budget; No more forgiveness for college student loans; Cancellation of tax reduction measures related to new energy, etc.
Democrats insisted on an unconditional increase in the debt ceiling to avoid a historic default. Reuters analysis said that this bill is almost impossible to be approved in the Senate, and even if it passes, it will be vetoed by Biden. McCarthy actually hopes to use the bill to pressure Biden to start negotiations on the debt ceiling.
According to CNN, in the face of the possible deadline of June 6, Biden convened four congressional leaders on the afternoon of May 1 and invited them to the debt ceiling meeting on May 5.