Politics

Yellen now says US could breach debt ceiling in mid-December

Secretary of the Treasury Janet Yellen pushed back the deadline for lawmakers to make a deal on the debt ceiling, giving them a bit more time to negotiate.

Tacking on 12 additional days after previously saying Congress would need to suspend or raise the country’s debt limit by Dec. 3, Yellen said in a Tuesday evening letter to House Speaker Nancy Pelosi that Dec. 15 is the new target.

“While I have a high degree of confidence that Treasury will be able to finance the U.S. government through December 15 … there are scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the U.S. government beyond this date,” she told Pelosi.

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Yellen, who said she would continue to update Congress as more information becomes available, added that it is “critical” that lawmakers work to raise or suspend the debt limit to ensure the full faith and credit of the United States.

Congress has just weeks before the U.S. could default on its obligations — something that has never happened and a prospect that economists fear could spawn chaos across the financial system.

Republicans have said they don’t want to help raise the debt ceiling with Democrats. Senate Minority Leader Mitch McConnell, a Kentucky Republican, agreed to a short-term extension in October, which he hoped would give Democrats time to include a longer-term increase in their planned reconciliation package.

The reconciliation package can pass with just a simple majority and thus does not need GOP votes. Still, Democrats are pushing Republicans to join with them, as has been done in the past, to help the country avoid defaulting on its obligations.



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