US Finance Minister Janet Yellen urged legislators to raise or cancel the state debt ceiling by enhancing the support of both parties of the Congress. Up to this point, the initiative was discussed only among the Democrats, Bloomberg writes. Thus, the head of the Ministry of Finance wondered over the salvation of the country from the banking tape (default), which threatens the excess of the current ceiling.
The offer of Yellen is considered as a challenge to Republicans who oppose the support of the increase in the maximum amount of public debt. Thus, they emphasize their disagreement with the plans of democrats to increase social spending. Representatives of the party Joe Bayiden were going to register the increase in the debt ceiling in the prepared resolution on the budget, with the help of which the social spending package will be implemented.
As a result, democrats in the Senate did not include a measure of 3.5 trillion dollars published on August 9. This happened because this document only prepares the ground for the so-called reconciliation bill (Reconciliation Bill), Republicans consider. This ruling requires only 50 votes for adoption in the upper chamber of the Congress, which eliminates the need for republican support.
Now Congress is in front of the danger of a potential default, which may cause damage to financial markets and undermine the confidence in the government.
Debt ceiling, that is, the maximum amount of debt, which the treasury can issue state institutions, again entered into force on August 1. Prior to that, it was temporarily recorded for two years at 22 trillion dollars. The outstanding public debt is currently 28.4 trillion dollars, and the ceiling is 28.5 trillion, since the amount of debt accumulated from August 2019 has increased to restored after two-year freezing.
Janet Yellen stated the legislators that the Ministry of Finance is on the verge of exhausting its special measures, and the Office can end the money shortly after the Congress returns from the break in September.