Wednesday, February 1, 2023
HomeEconomyBiden, McCarthy to meet on debt ceiling as Yellen warns of fallout

Biden, McCarthy to meet on debt ceiling as Yellen warns of fallout

By Andrea Shalal and Jeff Mason

DAKAR/WASHINGTON (Reuters) – Treasury Secretary Janet Yellen warned on Friday that if Congress fails to raise funds, The U.S. government cannot choose to pay some bills and not others, as President Joe Biden and Republican leader Kevin McCarthy plan to meet to discuss the issue. If the debt ceiling of $31.$4 trillion is not raised, the role of the dollar. She said the Treasury Department cannot prioritize its payments the way some Republicans have suggested.

rather than prioritizing one form of spending over another,” she said.

Administration officials and outside experts say placing certain spending Putting that on top of other spending would mark a fundamental departure that could destabilize the global economy.

Meanwhile, Biden told a gathering of U.S. mayors that “we’ll be talking to Republican House Speaker McCarthy” about raising the U.S. economy. The issue of the debt ceiling.

McCarthy tweeted that he would meet with Biden to “discuss responsible raising of the debt ceiling to address irresponsible government spending. “

It’s unclear when the talks will take place or what message Biden intends to send McCarthy is under pressure from far-right Republicans to take no action on the debt ceiling

White House officials have previously said they will not negotiate raising the debt ceiling, with administration officials betting Republicans will eventually cave in under pressure from investors over the prospect of corporate default.

The U.S. government hit its $31.4 trillion borrowing cap on Thursday, a figure that reflects money the government has already spent. Yellen has informed congressional leaders that her Sector has started using unconventional cash management measures to avoid default until early June.

) A one-day trip to Africa to discuss economic growth on the continent.

But The infiltration fight over the U.S. debt ceiling later in the year has unnerved markets and investors who fear the prospect of a historic default in Washington if budget differences are not resolved.

Yellen in In an interview with CNN, a potential U.S. default could hurt the global economy.

“This could lead to a global financial crisis. This will certainly weaken the dollar’s role as a reserve currency used in global transactions,” she said, adding that in such a scenario, many people would lose their jobs and see their borrowing costs rise.

Yellen pointed to the need to raise the debt ceiling to cover borrowing for spending Congress has already authorized.

“It’s just about paying the bills Congress has authorized,” She told CNN. “It’s something you can’t negotiate or haggle over. “

Former President Donald Trump has launched a 2024 campaign for the White House, urging his fellow Republicans to abandon seeking cuts he says will “destroy” popular retirees Social Security Program and Medicare Program for age 65 and over.

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