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On January 19, 2022, the United States will reach the federal debt ceiling set by Congress of approximately $31.4 trillion in 2021. The Treasury will have to take extraordinary measures to avoid defaults and continue to fund government activities. The use of extraordinary measures to avoid payment defaults is only possible for a limited time and the resources are expected to be sufficient until the beginning of June.
That gives Republicans and Democrats about five months to agree in Congress to raise or suspend the debt limit. In recent days, Treasury Secretary Janet Yellen reminded that failure to meet the government’s commitments would cause “irreparable damage” to the US economy, the lives of all Americans and global financial stability.
The accusation of the Dems: Republicans are pushing for default
In a letter sent by Yellen herself, it is expected that the “debt issuance suspension period” could be extended to next June 5. A way to buy valuable time to find a way to resolve the confrontation between the Republican-led House, which wants to use the negotiations to drastically cut public spending, and the White House on the issue of extending the debt ceiling. “With the passage of the extraordinary measures, the debt ceiling is officially a time bomb that we cannot defuse in time,” said Brendan Boyle, group leader in the House Budget Committee, and accused the Republicans of “pushing on the default”. expediency and urged them to “govern for the good of Americans”.
