US government threatens to default at the end of December

Washington In the US, according to the assessment of the Independent Budget Office of Congress (CBO), if Parliament does not raise the debt ceiling, the government is at risk of default before the end of the month. The Treasury Department recently warned that President Joe Biden’s government could run out of money by mid-December. So the CBO forecast is slightly more optimistic.

The current debt ceiling of around 29 trillion US dollars (26 trillion euros) has already been exceeded, according to the budget office. A default in the world’s largest economy could trigger a global financial crisis and economic downturn.

If the ministry made a December 15th payment of US $ 118 billion in full, the “extraordinary measures” to further fund the government would be quickly exhausted, the CBO said. “In this case, the Treasury Department would most likely run out of money before the end of December.” Minister Janet Yellen could postpone the payment from December 15 or only partially make it to have leeway until January.

Yellen, who testified in the Senate shortly before the CBO forecast, said the payment would be made in full. At the same time, she indicated that her house’s forecast is not accurate to the day. “I didn’t say that it was impossible to make it past December 15th.” But uncertainty increased every day, which is why she asked Congress to raise the ceiling “quickly”.

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Biden’s Democrats want to temporarily suspend or significantly raise the debt ceiling. The Republicans are opposed to this. The dispute over the upper limit is usually bitter in Congress until the last minute. So far, however, there has never been a serious failure.

More: The US president is unpopular. But the Democrats lack the convincing alternative to Biden – especially because Vice President Kamala Harris does not find her role.

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