US Treasury Secretary Janet Yellen estimated that the country’s financial reserves will run out in early June and that waiting to raise the debt ceiling could do serious damage to business and consumer confidence.
The Treasury Secretary U.SJanet Yellen, informed this Friday, the 26th, the country’s Congress that, if an agreement is not reached to raise or suspend the debt, the government may default on June 5. In a letter sent to the leader of the Republican majority of the House of Representatives, Kevin McCarthy, Yellen increased by four days the deadline that her portfolio calculates for the end of the reserves with which it will be able to fulfill payment obligations, and insisted on asking congressmen to act “as soon as possible” to avoid it. “Waiting until the last minute to raise the debt ceiling can seriously damage business and consumer confidence,” he added. Yellen recalled that her department needs to disburse in the first two days of June US$ 130 billion (R$ 651.4 billion) in payments to Social Security, veterans and beneficiaries of Medicaid, the government’s health program, which will leave the coffers ” at an extremely low level of resources”.
And that level, she warned, will not allow the Treasury to meet obligations scheduled for the week of June 5, such as another $92 billion (R$460.9 billion) payment to Social Security and Medicaid. “If Congress fails to raise the debt ceiling by the deadline, American families will be in dire straits, America’s global standing will be undermined, and doubts will arise about the nation’s ability to protect its national security interests,” it stressed. Treasury secretary. Talks between Republican Party congressmen and the White House continued on Friday, the 26th, with no official announcement that an agreement had been reached. The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, also today called for an agreement as soon as possible. Deputy Treasury Secretary Wally Adeyemo warned that there is no “plan B” that would allow the US to “continue to meet” its financial commitments if June 5 arrives and the negotiating parties fail to find a solution.
On Thursday night, the 25th, several US media outlets, including “The New York Times”, reported that sources close to the negotiations said that an agreement could be announced “soon”. The possible deal would raise the debt ceiling for two years and impose limits on discretionary government spending, except for military or veterans matters, the publication reported. Unlike most countries, the US can only borrow up to the limit set by Congress – the debt ceiling – which requires a legislative agreement every time the country needs to increase it to honor its debts. The current debt ceiling, of US$ 31.4 trillion (R$ 157.3 trillion), was reached in January, and the country could default as early as June 1st if congressmen from the Democratic and Republican parties do not reach an agreement. agreement to increase it before.
*With information from the EFE agency
Source: Jovempan
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