US Treasury Secretary Janet Yellen again called on Congress on Tuesday to "
vote an increase or suspension of the
debt ceiling", and to do so "
unconditionally
", while Republicans want to link an increase in the ceiling to a reduction in debt. public expenses.
The plan, presented on April 17 by Republican House Speaker Kevin McCarthy, proposes a $4.5 trillion cut in public spending.
In exchange, they undertake to raise the ceiling to 1.500 billion dollars.
If this level is not reached by March 31, 2024, then a new vote will be necessary to allow the debt to continue to increase.
So far, Republicans and Democrats have failed to agree on the subject, at the risk of seeing the United States having to default on its debt "
possibly in early June
", Moody's Analytics warned Monday.
However, a default, unprecedented in the history of the country, “
would cause an economic and financial catastrophe
”, underlined Janet Yellen, during a speech delivered in California.
"
Over the long term, a default would increase the cost of borrowing and our future investments would be substantially more expensive
," insisted the Treasury Secretary.
Under these conditions, “
Congress must vote to raise or suspend the debt ceiling.
He must do so without conditions.
And he must not wait until the last minute
, ”hammered Janet Yellen.
The subject of a standoff between the White House and the House of Representatives, with a Republican majority, for several weeks, the question of the debt ceiling took a new political turn on Tuesday with the announcement of the candidacy of President Joe Biden for a new term in 2024.
Read alsoVote in the US Congress on the debt ceiling in the coming days
“The only timely way out that allows us to pay all our bills”
Kevin McCarthy reacted on Twitter saying that Joe Biden seemed "
focused on his own political future when he should be on the future of the United States
".
President “
Biden should have announced that he was finally coming to the negotiating table in order to discuss a responsible increase in the ceiling and thus avoid the first flaw in our history
”.
In early March, Federal Reserve (Fed) Chairman Jerome Powell stressed that raising the ceiling was "
the only timely way out that allows us to pay all our bills
", stressing, otherwise, the risk consequences "
difficult to estimate
" but which "
could be extremely negative and cause long-term damage
”.
Monday Moody's Analytics estimated that the plan proposed by Kevin McCarthy could result in a 0.6 percentage point drop in US potential growth for 2024 as well as the destruction of 780,000 jobs.
The United States is one of the rare countries where the Parliament votes on the one hand on the annual budget deficit, which comes mechanically to increase the public debt, then on the fixing of a ceiling, in fact regularly reached.
Since the early 1960s, the cap has been raised 78 times, according to the Treasury Department.
