US Treasury Secretary Janet Yellen warned today that a default on the US debt, which could happen as early as June, would cause “financial and economic chaos”.
On Friday, the President of the United States, Joe Biden, announced that he will not agree to negotiate with the Republicans to increase the ceiling of the North American debt, accusing the opposition of threatening the suspension of payments by the State, already from June 1st.
“We can debate where to cut, how much to spend, where to tinker with the tax system so everyone pays a fair share … but not under threat of suspension of payments,” Biden said during a speech to the Republican-controlled House of Representatives. .
Today, in a television interview, the US Secretary of Defense warned of the risks of a debt default, ensuring that it would be “an economic and financial disaster”.
A US debt ceiling is legally established and can only be raised by a majority vote in Congress.
The House of Representatives – where the Republicans have a majority – approved a bill at the end of April that determines that the increase in the debt ceiling would only be granted in exchange for cuts in public spending.
However, this proposal should be rejected in the Senate – where the Democrats enjoy a majority – and Joe Biden has made it clear that he will not negotiate concessions, despite being available to talk about the subject with the leaders of both parties in Congress, in the coming years. days.
“I know that he [Joe Biden] wants to put in place a process that allows for discussions about priorities and spending levels, but these negotiations should not be conducted with a gun pointed at the head of the American people,” Janet defended today.
“We must not get to the point of questioning whether or not the President can issue debt. This would create a constitutional crisis,” explained the Treasury Secretary.
Several analysts have already warned that debt default could tip the United States into an immediate recession.
Since the 1970s, the US Congress has approved raising or suspending the debt ceiling at least 78 times.
