If the debt ceiling is not raised, the US is unlikely to default for several months. But the Republicans make it clear: A raise will not be a sure hit.
Washington – There are signs of a bitter dispute between Democrats and Republicans in Congress over raising the debt ceiling.
“A default would needlessly plunge the country into economic chaos, collapse and disaster, while giving our competitors like China a historic advantage over us,” the White House said.
Karine Jean-Pierre, a spokeswoman for US Democratic President Joe Biden, warned: “It is important that Congress recognize that it is constitutionally responsible for meeting the debt ceiling.”
Republican Andy Biggs previously said the debt ceiling should not be raised. “Democrats have recklessly spent our taxpayers money and debased our currency,” the far-right wrote on Twitter.
The new Republican speaker of the House of Representatives, Kevin McCarthy, also made it clear that he only wanted to increase the debt ceiling under certain conditions, for example, in exchange for savings in the social sector. “If he gave his son a credit card and he kept going over the limit, he wouldn’t keep raising it,” he explained. Republicans regained control of the House of Representatives in the November midterm elections.
US: “Extraordinary Measures” Needed
US Treasury Secretary Janet Yellen warned last week that the US government was about to default. If the debt ceiling is not raised or suspended, this Thursday the applicable debt ceiling will be reached.
Then the Ministry of Finance would have to take “extraordinary measures” in order to continue guaranteeing the solvency of the Government. But even then, a default could only be delayed until early June. The debt limit so far is around 31.4 trillion US dollars (around 29 trillion euros).
Global financial crisis looming
A default by the world’s largest economy could trigger a global financial crisis and economic recession. In 2011, a newly elected Republican majority in Congress delayed raising the debt ceiling. As a result, the US credit rating was lowered for the only time in history.
In the United States, Congress sets a debt ceiling at irregular intervals and determines how much money the state can borrow. The limit has been increased dozens of times since it was introduced in 1917, otherwise the money would have run out. dpa