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Monday, April 22, 2024

US faces cash crisis, Treasury Secretary Yellen warns

President Biden calls for meeting on May 9 to discuss debt limit

US Treasury Secretary Janet Yellen has warned President Joe Biden to raise or suspend the debt limit to prevent a possible cash crisis in the country.

She said the US Treasury will be unable to continue to “satisfy all of the government’s obligations by early June,” Yellen said in a letter on Monday, adding: “It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills.”

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The president called a meeting to discuss this issue on May 9. The debt limit has been raised or changed for 78 times since 1960.

Mentioning the previous crisis, Yellen said: “Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.”

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If Congress will not increase the limit, this situation may cause severe hardship to American families, harm the country’s global leadership position, and raise questions about the US’ ability to defend its national security interests, Yellen added.