US Treasury Secretary Janet Yellen continues to warn fellow citizens about possible various threats. This time, she has voiced strong concern over the nation’s exhausted borrowing capability, calling for a debt ceiling hike.
Delivering a speech to Congress, Janet Yellen highlighted the need to revise the government’s fiscal rules and raise the debt limit, noting that the current situation poses a serious threat to the US economy. Moreover, the Treasury Secretary outlined her worries in an official letter to congressional leaders. According to her, such a move would not authorize more government spending but would allow the Treasury Department to pay for existing expenditures and debts. "Failure to meet those obligations would cause irreparable harm to the US economy and the livelihoods of all Americans," she added.
The main problem is the established public debt ceiling. Yellen warns of economic harm if the debt ceiling is not raised or suspended. This could trigger a debt default, she points out. The Treasury Secretary has called October 1 a critical date for US government cash flows as the new fiscal year will require the administration to pay off huge bills. Thus, the country may face serious difficulties in this period. In other words, she calls on Congress to take urgent and decisive steps.
Earlier, Republicans noted they would not vote to increase the debt limit if US President Joe Biden and Democrats did not agree to cut spending or take other measures to reduce the national debt.
