US Treasury Secretary Janet Yellen warned this Sunday that a default on US debt, which could occur as early as June, would cause “financial and economic chaos.”
On Friday, US President Joe Biden said he would not agree to talks with Republicans to raise the North American debt ceiling, accusing the opposition of threatening to suspend government payments as early as June 1st.
“We can discuss where to cut, how much to spend, where to change the tax system so that everyone pays a fair share (…), but not under the threat of suspension of payments,” Biden said during a speech in the House of Representatives. representatives controlled by the Republicans.
In a televised interview this Sunday, the US Secretary of Defense warned of the risks of default, guaranteeing that it would be “an economic and financial disaster.”
The US debt ceiling is set by law and can only be raised by a majority vote in Congress.
The Republican-majority House of Representatives passed a bill in late April specifying that debt ceiling increases would only be granted in exchange for government spending cuts.
However, the proposal must be rejected in the Senate, where the Democrats have a majority, and Joe Biden has made it clear that he will not negotiate concessions, despite the fact that he is ready to discuss this topic with the leaders of both parties in Congress in the coming days.
“I know that he [Joe Biden] wants to put in place a process that allows discussions of priorities and levels of spending, but these negotiations should not be conducted with an eye on the head of the American people,” Janet defended this Sunday.
“We should not go as far as the question of whether the president can issue debt. This will lead to a constitutional crisis,” the Minister of Finance explained.
Several analysts have already warned that a debt default could send 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.