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US: Federal government borrowing limit to be exhausted on December 15

The US federal debt limit is going to be exhausted again in mid-December, after its temporary increase in October to avoid the risk of the country declaring a default for the first time in history, the US Treasury Secretary warned on Tuesday. , Janet Glenn.

“According to some scenarios, the Treasury Department will be found to have insufficient resources to continue funding the US government beyond” December 15, “Ms Glenn said in a letter to Democrats and Republicans in Congress.

“In order to secure the full confidence and credibility of the United States, it is essential that Congress raise or suspend the debt limit as soon as possible,” he said.

Congress passed a text in October authorizing a temporary increase in the federal debt limit by $ 480 billion, allowing it to continue making payments until early December.

The measure was approved with the support of only Democrats, as Republicans vehemently opposed the idea.

“It would be an irresponsible and disastrous decision not to raise the debt ceiling. I can not imagine our Congress doing that,” Joe Biden’s Treasury Secretary’s Treasury Secretary told public radio earlier in the day. NPR.

She reiterated her support for the possible abolition of the state debt limit, which exists only in a few countries.

Although this is not “President Biden’s position”, Ms Glenn described the move as “desirable”.

The borrowing limit imposes “arbitrarily at a time when it becomes impossible to finance projects and deficits decided by Congress in the past,” he explained, calling the measure “political.”

When the borrowing limit is exhausted, it is impossible for the government to issue securities and when their liquidity is exhausted it is forced to declare a moratorium on payments. This is a scenario that has never been a reality to date.

The leader of the Republicans in the Senate, Mitch McConnell, hinted yesterday that there might be room for debt settlement, assuring that “we will find a way to avoid a moratorium on payments. We always do.”

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Source From: Capital

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