US: Treasury Secretary asks Congress to raise debt limit – 08/02/2021

Cruises will begin in the United States in July or August - 05/24/2021

WASHINGTON, August 2, 2021 (AFP) – US Treasury Secretary Janet Yellen on Monday urged lawmakers to act “as quickly as possible” to raise the debt limit, so that the country honors your financial commitments without cutting spending. can do.

“I urge Congress to protect the trust and credibility of the United States of America by taking action as soon as possible,” Janet Yellen said in a letter to lawmakers.

The debt ceiling mechanism is in force in the United States from Sunday after a two-year suspension.

When the debt limit is reached, the country cannot finance itself by issuing loans, but can use the available funds.

Yellen therefore announced the implementation of “extraordinary measures” to suspend some of the spending, which he had already announced in a July 23 letter to Congress.

According to economists, this will give only a few weeks of relief before the default.

The measures would “allow an additional indebtedness of about $350 billion, but we expect this amount to be used by the end of September”, according to calculations by Nancy Vanden Houten of Oxford Economics in a note published on Monday.

The theme is recurrent in American political life. Since 1960, Congress has acted 78 times to raise or suspend this debt limit, according to Treasury data.

The mechanism was suspended from August 2019 to July 31, 2021, due to an agreement between the Donald Trump government and Congress.

The US debt and fiscal deficit continued to grow during the coronavirus pandemic as the executive adopted three big spending plans to tackle the economic crisis.

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About the author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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