McCarthy, however, has said those cuts are not in the picture, as has Senate GOP leader Mitch McConnell. President Joe Biden and new Republican House speaker Kevin McCarthy met once earlier this month to talk about the debt limit, but expectations are low for quick progress as GOP lawmakers push for steep spending cuts in exchange for a debt ceiling deal.īiden has since used his bully pulpit to accuse Republicans of plans to cut Medicare and Social Security programs. into default, the dollar would likely lose its position as the international unit of account, forcing the government and companies to pay their international bills.
But she said it’s “critical that Congress act in a timely manner.” A default on US federal debt an outcome US Treasury secretary Janet Yellen has warned would lead to catastrophe is still viewed as unlikely. This low interest rate translates into interest savings for the federal government of about 700 billion over the course of a decade, according to the Brookings Institution. 'On top of that, it is unlikely that the federal government would. The spread on one-year credit-default swaps, the most popular contracts for wagering on a missed payment, has surged in recent days, touching a record 1.75 percentage points on Thursday, according. Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation’s $31.4 trillion borrowing authority or suspend the limit for a period of time. defaults, it would be 'catastrophic,' she said Tuesday at a National Association of Counties conference in Washington. Treasury Secretary Janet Yellen notified Congress in January that her agency was resorting to “extraordinary measures” to avoid default, and that “it is unlikely that cash and extraordinary measures will be exhausted before early June.” debt have contributed to moving up the X-date.
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and global economy by beginning, in earnest, bipartisan negotiations around our nation’s fiscal health and taking action to uphold the full faith and credit of the United States well before the X-Date,” he said.Īkabas said the December 2022 big spending bill, an extended pause on student loan repayments and high interest rates resulting in higher costs to service U.S. “Policymakers have an opportunity now to inject certainty into the U.S. Previewing the data for reporters on a morning call, Shai Akabas, the center’s director of economic policy, said the new projections reflect “considerable uncertainty in our nation’s current economic outlook.” Treasury uses to pay the government’s bills would not be exhausted before the third quarter of 2023. That inches up from the center’s previous prediction in June 2022 that the “extraordinary measures” that U.S. will reach its statutory debt limit as soon as the summer or early fall of 2023.
The Bipartisan Policy Center, which forecasts the approximate “X-date” when the government will no longer be able to meet its financial obligations on time, said the U.S.
could face an unprecedented default on its obligations as soon as early June if Congress does not act to lift the debt limit, a Washington think tank said Wednesday.
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