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US Treasury Secretary Yellen
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SAUL LOEB v AFP
When the debt ceiling is raised in the USA, a bitter dispute threatens, which could also weigh heavily on the global economy.
US Treasury Secretary Janet Yellen told Congress that the current debt ceiling has been reached and her department must now tap into reserves.
The US can no longer borrow to pay its bills.
"I urge Congress to act immediately to protect the full confidence and credit of the United States," Yellen wrote.
Although the USA is not yet insolvent, it is only a matter of time.
A default by the world's largest economy could trigger a global financial crisis and economic downturn.
The United States would then no longer be able to pay a large part of its bills - millions of people could lose their jobs.
A default would also damage confidence in the creditworthiness of the world's largest economy.
In 2011, a newly elected Republican majority in Congress delayed raising the debt ceiling.
As a result, the US credit rating was downgraded for the only time in history.
Yellen said the Treasury Department had taken "extraordinary measures" to continue to guarantee the government's solvency.
Specifically, investments in certain public pension funds are affected.
But even that could only delay a payment default until the beginning of June.
The debt limit so far is around $31.4 trillion.
So far, Republicans and Democrats have still agreed to raise the limit - albeit often after much trembling and several rounds of negotiations.
But this time the situation could be more difficult: The Republicans regained control of the House of Representatives in the midterm elections in November.
Since the newly elected Republican chairman of the House of Representatives, Kevin McCarthy, initially lacked a majority in his own ranks, he had to make extensive concessions to the extreme right wing of his group.
Radical MEPs are opposed to raising the debt ceiling.
McCarthy has already made it clear that he only wants to raise the debt ceiling under certain conditions - for example in return for savings in the social sector.
"If you gave your kid a credit card and they kept going over the limit, you wouldn't just keep increasing it," he said.
The White House, on the other hand, warned against playing political games with the debt ceiling.
"A default would unnecessarily plunge the country into economic chaos, collapse and disaster while giving our competitors like China a historic advantage over us," it said.
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.
The money is not used to finance new expenses – it is used to meet commitments that have already been made.
The debt ceiling is not to be confused with the budget.
Here, too, there are regular arguments in Congress because the Democrats and Republicans cannot agree on a new budget law, which can result in government business being suspended, a shutdown.
ssu/dpa
