The United States will run out of money "
during the month of October
" if the debt ceiling is not raised, US Treasury Secretary Janet Yellen warned on Wednesday in a letter to elected officials of the United States. Congress.
Read alsoUnited States: Yellen urges Congress to raise debt ceiling
The debt ceiling was suspended for two years, between August 2019 and July 2021, thanks to an agreement reached between the Trump administration and Congress.
"
Since the restoration of the debt limit on August 1, the Treasury began utili
s
er some extraordinary measures to continue funding the government
," says Janet Yellen.
These include the suspension of certain expenditures and investments, for example concerning the retirement savings plan for federal civil servants.
Janet Yellen had already sent a letter in early August urging to raise the debt ceiling so that the United States can honor its financial commitments and avoid default.
But this time, she evokes a concrete date, hammering that "
once all available measures and available liquidity are exhausted
", the United States will be "
unable to meet its obligations for the first time in its history
."
Financial explosion
The US debt and deficit soared during the Covid-19 pandemic as the government adopted three massive spending plans in the face of the economic crisis.
The Treasury believes that "
the most likely is that the liquidity and the extraordinary measures will be exhausted during the month of October,
" she explains.
A default by the United States would also cause a financial blast.
In 2011, the rating agency Standard and Poor's had withdrawn its “
AAA
”
rating from the country
, which in principle allowed them to borrow on the markets at minimum cost, sanctioning long months of political blockage on raising the ceiling of the debt.
Janet Yellen urges Republicans and Democrats on Wednesday not to "
wait until the last minute
" to reach an agreement, at the risk of seriously damaging business and consumer confidence.
It will also increase short-term borrowing costs for taxpayers and negatively impact the United States' credibility rating, she notes.
"
A delay that calls into question the ability of the federal government to meet all of its obligations would likely cause irreparable damage to the US economy and global financial markets
," she also warned. “
At a time when American families, communities and businesses are still suffering from the effects of the global pandemic, it would be particularly irresponsible to endanger the confidence and credibility of the United States,
” she concludes.