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U.S. Treasury Secretary Janet Yellen and Congress leader Tuesday. Obviously, the US government is expected to run out of funds before mid-October. To avoid this financial disaster, the Democrats have been pinning their hopes on the Republicans to vote to raise or suspend the national debt ceiling. However, this choice seems unlikely.
“… We learned from the previous debt limit deadlock that waiting until the last minute may severely damage business and consumer confidence, increase taxpayers’ borrowing costs, and have a negative impact on the credit rating of the United States in the next few years,” Janet Wrote in a letter.
What is the national debt limit?
According to Forbes, the debt limit Credit and other functions For the government. It determines how much money the government can borrow to pay bills. Forbes compares not raising the debt limit with credit card maxes. Some of the government’s bills include: “Social Security, Salaries and Tax Rebates for Soldiers and Federal Employees,” and interest on old bills. If there is no salary increase or suspension, payment may be missed or delayed. This may also cause a chain reaction in the stock market.
“We may see indefinite delays in key payments,” Janet wrote in a statement. Wall Street Journal column last week“Nearly 50 million seniors may stop receiving social security checks for a period of time. The military can be unpaid. The millions of families that rely on monthly child tax credits may experience delays.”
What is the deadline for action?
In Tuesday’s letter, Janet stated in detail that the US government will “exhaust its extraordinary measures” by October 18. She also warned that this date is only an estimate. This means that if the government has unexpected or reduced spending, the date may “unpredictably move forward or backward.”
Jane wrote: “Not sure if we can continue to fulfill all the country’s commitments after that day.”
Her warning came hours after Senate Republicans blocked a bill that would suspend debt limits. The expedient solution solved two current financial problems: government funds and debt limits.
CNN reported that government funding is Set to expire September 30, but the bill attempts to extend the date to December 3. The bill will also suspend the debt limit until December 16, 2022.
What is the leader doing?
Although it passed the House of Representatives, Republicans voted 48 to 50 to close it on Monday. Senate Majority Leader Chuck Schumer initially voted in favor, but later voted against. No other Republicans voted for the measure. Most people attribute the current situation to Biden’s administrative expenses, but Janet refuted this claim in her article in the Wall Street Journal.
“Even if the Biden administration does not approve any spending, we still need to resolve the debt ceiling issue.”
If it is reported that the United States defaults on debt, Americans will also face stock market changes, soaring interest rates and economic shocks.
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