US Treasury Secretary Janet Yellen said that the potential failure of the United States to pay its debts could cause a global financial crisis and undermine the role of the dollar as a currency for reserves, explaining that this situation may lead to many people losing their jobs and higher borrowing costs
The US government reached the maximum borrowing ceiling at $31.4 trillion last Thursday, reflecting the amount of money the government has already spent, reports Al-Rai daily quoting Al Arabiya.net.
Yellen informed congressional leaders that her ministry had begun to use exceptional liquidity management measures that could avoid the country’s risk of default until June 5, while the White House refuses to negotiate with hard-line Republicans regarding raising the debt ceiling, because it believes that many of them will back down from their demands.
Last Friday, US President Joe Biden pledged to hold a “discussion” with Speaker of the House Kevin McCarthy regarding US debt amid a looming debate about raising the debt ceiling, indicating during an event with the mayors of cities that the failure of the United States to pay debts would be an unparalleled catastrophe financially.
Biden said, “The debt we’ve been paying has accumulated over 200 years, and we’ll have a simple discussion about that with the new majority leader in the House of Representatives.”
“As the president has said many times, raising the debt ceiling is not a negotiation,” White House spokeswoman Karen Jean-Pierre said. “It is an obligation of this country and its leaders to avoid economic chaos.”
Biden will host Democratic congressional leaders at the White House next Tuesday, while no date has been set for McCarthy’s visit.
Jean-Pierre said, “We will have a clear discussion about two different visions for the country, one that reduces social insurance and the other that protects it, and the president will be happy to discuss that with the Speaker of Parliament.”
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