US Treasury Secretary renews pressure on Congress to raise US debt ceiling

Wednesday, September 08, 2021 - 18:46
Point Trader Group
US Treasury Secretary renews pressure on Congress to raise US debt ceiling

U.S. Treasury Secretary Janet Yellen on Wednesday urged Congress again to address the issue of the national debt ceiling, saying it was unclear how long Treasury efforts to fund the U.S. government would continue temporarily and citing ongoing economic concerns about the pandemic.

"The most likely outcome is that liquidity and extraordinary measures will be exhausted during the month of October," Yellen wrote in a letter to lawmakers regarding the US government's borrowing limit.

Democrats and Republicans are staring at a historic financial crisis if they do not act, which could trigger a catastrophic default or temporary shutdown of some federal operations.

The Democratic-led Senate and House of Representatives leaders are expected to force a forced vote to raise the $28.4 trillion debt limit in late September.

The current national debt limit was technically exceeded on July 31, but the Treasury Department circumvents any default through what it calls "extraordinary measures".

Yellen, who has previously warned Congress about the default, said the department was unable to provide a definitive estimate of how long those steps would last, citing "a fog" and saying it would provide lawmakers with updated information again at a later time.

"At a time when American families, communities, and businesses continue to suffer from the effects of the ongoing global pandemic, it would be particularly irresponsible to threaten the entire faith and credibility of the United States," she wrote.

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