USA at risk of default, no meeting agreement between Biden and McCarthy

Still no agreement between US House Speaker Kevin McCarthy and US President Joe Biden on raising the debt ceiling to avoid default. The US may never be able to service its debt as of June 1st.

The meeting

The meeting was productive for McCarthy who believes an agreement is needed within 24-48 hours to give Congress time to vote on it. “The only way forward is a bipartisan agreement” declares Biden who assures: “Default is not an option”. Treasury secretary Janet Yellen, who had proposed in 2021 to abolish the ceiling, has long been pressing because come to an agreement The United States may no longer be able to meet its obligations by June 1st, given that only $57 billion is left in the Treasury houses.

The public debt limit

The debt ceiling is a control tool for American public finances created in 1917 when, in order to meet the expenses related to the world war, the American government modified the legislative process in order to be able to resort to debt more easily. Since then, the debt ceiling has been the main tool Congress uses to control government spending: when it spends more than it collect, must take a loan. The 19 last January the Treasury Department recorded that payments exceeded receipts. As a result there have been delays in payments, but this will only be possible until June 1st. Last year, the public debt exceeded 31 trillion dollars for the first time. Now it has reached 31.4 trillion.