Deadlock threatens Congress to avoid US default-zimo news


Although Treasury Secretary Joe Biden warned that if no action is taken, the United States will run out of money on October 18, but if the US Congress wants to achieve a rapid increase in the debt ceiling on Tuesday, this situation does not seem to be resolved.

Both Democrats and Republicans agree that US default will lead to a global financial disaster, which will have a serious impact on Americans, and hope to avoid it at all costs.

But their solutions to achieve this goal are very different. Even if time is running out, on Tuesday neither side seemed ready to give way to breaking the deadlock. At the same time, Congress’s deadlock over the financing of the Biden plan continued.

“Congress must quickly resolve the debt limit issue. If this is not the case, the United States will default for the first time in history,” Treasury Secretary Janet Yellen warned before the Senate Banking Committee.

In a letter, Joe Biden’s Minister of Finance warned that it is expected that after October 18, “the Ministry of Finance will eventually have very limited resources, which will soon be exhausted”.

In front of the senator, she warned that arrears in payments in the United States would have “catastrophic” consequences for the US economy, and she had never intervened before.

The government can no longer borrow money, pay bills, or pay civil servants’ salaries.

She insisted that this “will weaken people’s confidence in the U.S. dollar as a reserve currency.”

Since the country has found itself in a similar stalemate in the last hour, “we know that waiting until the last minute will seriously damage the confidence of businesses and consumers, increase taxpayers’ borrowing costs, and have a negative impact on credit ratings. The United States will have a negative impact on its credit ratings in the next few years. ,” the official said.

During the Obama administration, the political deadlock in Congress caused the Standard & Poor’s rating agency to revoke the “AAA” rating of U.S. debt, triggering market turbulence.

On Tuesday, Wall Street ended in a severe correction, and it is about to usher in the worst month of the year.

-“Let’s stop talking about it”-

The U.S. debt limit, which only Congress has the power to increase, will take effect on August 1. If it does not raise the current US$28.4 trillion cap, it prohibits the United States from issuing new loans to finance itself.

Democrats control Congress, but their majority in the Senate is too narrow to surpass the Republican Party’s obstructive power.

However, the latter categorically refused to vote with them to allow them to raise the debt ceiling because they said that this amounts to a discretionary mandate for Joe Biden’s “irresponsible” investment plan.

Republicans urge Democrats to approve themselves and adopt complex parliamentary strategies, which may take weeks.

Senate Democratic leader Chuck Schumer closed the door on Tuesday: “This road is too risky for the country. Let’s stop talking about it.”

Since the 1960s, the debt ceiling has been raised or suspended about 80 times. No party has ever prevented this measure. Democrats are angry that Republicans refuse to continue this tradition.

Mr. Schumer then tried to find a consensus in the semicircle to achieve the suspension of the debt ceiling through a simple majority. Republican leader Mitch McConnell opposed.

At the same time, lawmakers must approve the new federal government budget before midnight on Thursday night if they want to prevent sudden cuts in public funds (“closures”).

This measure was a consensus, but it was blocked by Republicans in the Senate on Monday night because it was accompanied by a debt ceiling.

Democratic congressional leaders have vowed to avoid shutting down government services, but have not yet proposed a new budget-focused text late Tuesday afternoon.

The two huge projects on infrastructure and social reform that Joe Biden wanted were in trouble in Congress in the context of the struggle between Democrats.

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