Home Politics Debt ceiling bargaining starts again, $31.4T isn’t enough

Debt ceiling bargaining starts again, $31.4T isn’t enough

US President Joe Biden has to meet with Republican Speaker of the US House of Representatives Kevin McCarthy and other congressional leaders, to discuss the debt ceiling. Meanwhile, US Treasury Secretary Janet Yellen warns that the US may be unable to meet all its financial obligations in just a few weeks.

The conversation, due to take place May 9, is “the first sign of progress” when it comes to debt ceiling negotiations, according to Bloomberg news agency.

The US is currently allowed $31.4 trillion in debt. Actually, that ceiling was reached back in January, but with “extraordinary measures” it still remained possible to continue spending money for a while. How long that can continue now is unclear and “difficult to estimate,” but on Monday Yellen said there may be no more cash as early as June 1. Economists previously still thought the U.S. could foot the bill until August.

Yellen therefore called on Congress in a letter Monday to “take action as soon as possible.” If the debt ceiling is not raised, civil servants can no longer be paid and benefits can no longer be paid. It will also jeopardize the United States’ credit rating. Economists fear it could rock the financial markets.

U.S. media report that the debt ceiling has been raised, extended or revised as many as 78 times since 1960. It has never happened in the country’s more than 200-year history that America could no longer meet its financial obligations, Biden stressed Monday.

Republicans did agree to raise the debt ceiling last week, but McCarthy countered with a raft of cuts in government spending. Biden refused to agree, saying the cuts would make some of his policies impossible.

About the author: John Campbell

John Campbell is the godfather of Polimedia and the oldest author from the whole team. His occasional guidance is crucial for everyone he advises.

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