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Yellen in Congress: If the debt ceiling is not raised, the country faces an economic disaster

2023-05-08 16:36:27, Kosova & Bota CNA

Yellen in Congress: If the debt ceiling is not raised, the country faces an

US Secretary of the Treasury Jane Yellen

The American Secretary of the Treasury, Janer Yellen, says that, starting from June 1, the government of the United States risks running out of money. Her warnings come days before President Joe Biden meets with Democratic and Republican lawmakers to discuss the need to raise the borrowing limit.

Financial and economic chaos will follow if Congress does not act to raise the debt limit so the US government can borrow more to pay for spending, Treasury Secretary Janet Yellen warned on ABC's "This Week."

"Whether it's non-payment of interest on debts, Social Security wages, or health care for the elderly, we simply won't have enough money to meet all of our obligations."

The situation may also have international consequences.

"Securities offered by the US Treasury constitute the most secure foundations of the world financial system. "The failure of the United States to pay the debts would call into question our ability to secure the loan ," says Mrs. Yellen.

On Tuesday, President Joe Biden is expected to hold meetings with the leaders of both parties in Congress. Democrats have pushed to raise the debt ceiling without preconditions. Republicans want to cut federal spending.

Senator James Lankford spoke on the ABC television channel about the expectations from the meeting.

"Everyone knows that there is wasteful spending in the government. We need to talk about these things and what our priorities are. How should we spend on these advantages, and make sure that we are reforming".

So far President Biden has refused to negotiate with Republicans on the debt ceiling, insisting on lifting the limit unconditionally, as has been done dozens of times in the past by presidents of both parties.

Speaking on NBC's "Meet the Press" show, House Minority Leader Hakeem Jeffries said Democrats support the president.

"Ultimately, everyone appreciates each particular piece of legislation that comes our way, but we're in step with President Biden and the Democrats in the Senate. We want to do the right thing for the American people."

The United States has never defaulted on its debt payments. While the funds are expected to run out this summer, calls for negotiations are increasing every day./ VOA