Joe Biden, USA | – The United States can run out of money in three weeks

NEW YORK (Nettavisen / NTB): US Treasury Secretary Janet Yellen now goes out and warns that the US will run out of money on October 18 if the debt ceiling is not raised.

– No one will be spared

– It is unclear whether we can continue to meet all the nation’s demands after that date, Yellen writes in a letter to the leaders of Congress who CNN has gained access to.

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“All belief in and credit to the United States is jeopardized,” Yellen wrote in the letter.

Yellen’s warning came shortly after Republicans blocked a bill that could have raised the debt ceiling.

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According to Yellen, there is a high risk that the United States may default on its debt within a few weeks if Congress fails to resolve the issues, which could have huge consequences for the US market and economy, in addition to the fact that millions of Americans will not be paid.

“No one will be spared,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. to CNN last week about the consequences of not being able to keep the state apparatus going.

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Speculation that the United States may default on debt also affects Wall Street on Tuesday. On Tuesday night, the Nasdaq ended down as much as 2.8 percent, and it was thus the worst day since March this year. Both the Dow Jones and S&P 500 also ended down 1.6 and 2 percent, respectively.

Struggle over public finances and reforms

The US Congress is in an unusually demanding week. The Democrats are trying to get through major reforms and at the same time prevent the state apparatus from being closed.

President Joe Biden’s major infrastructure program and social reform programs are nearing a final vote in the House of Representatives and the Senate. The total price tag is several thousand billion dollars.

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At the same time, more urgent problems must be solved. A majority must support a budget that ensures continued financing of the state apparatus. If this does not happen, some of it may have to be shut down.

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It could have even greater consequences if there is no agreement to increase the US debt ceiling once again. It will send shockwaves through the economy and financial markets if the United States fails to meet its financial obligations. Finance Minister Janet Yellen has warned of “catastrophic consequences” if that happens.

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The first attempt to raise this roof was stopped on Tuesday night. The Democrats will probably try again later this week, but they have a powerful opponent.

Moody’s estimates that almost six million jobs could be lost, which will increase unemployment in the US to almost nine percent. In addition, almost a third of the share value will disappear, which means that around 15 trillion dollars of household values ​​will evaporate.

Sier nei

The Republican leader in the Senate, Mitch McConnell, has completely refused to increase or set aside the debt ceiling if it also means that Biden gets through ambitious political reforms.

Democrats, for their part, say they worked with Republicans to increase the debt ceiling even when former President Donald Trump pursued policies they did not support, such as building a border fence with Mexico.

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They are now putting pressure on the Republicans by linking the issue of the debt ceiling and the financing of the state apparatus. McConnell will address the two issues separately.

Big plans

Biden’s plans are ambitious: Free daycare and subsidies for families with young children. Support for dental care and hearing aids for the elderly through Medicare. Infrastructure improvements in all states.

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If he succeeds, it could be a crucial moment in his presidency. But it will not be easy. Republicans are reluctant to give him political victories. Biden himself draws on many decades of experience in Congress and even calls around to try to influence the representatives.

When he received a refill dose of coronary vaccine on Monday, Biden confirmed that he would have calls the same evening and also on Tuesday to try to bring the process forward.

– You know me, I was born an optimist. We’ll get this done, Biden said.

Help from the House of Representatives

Democrats have a majority in both houses of Congress, but in the Senate there are fine margins. The party relies on Vice President Kamala Harris’ double vote to gain a majority.

Then opposition from one’s own party can be the tongue in cheek. Two Democratic senators, Joe Manchin of West Virginia and Arizona’s Kyrsten Sinema, have signaled that the $ 3.5 trillion infrastructure package is too large.

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In the House of Representatives, Speaker Nancy Pelosi is well on her way to cutting costs in the giant packages so that Democrats can win over internal opponents. She has asked her party colleagues to make difficult choices.

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Biden, for his part, believes that the net cost of welfare measures and climate measures is zero, as they will be financed by tax increases. The plan is to increase corporation tax from 21 percent to 26.5 percent for companies with a turnover of more than 5 million dollars a year, and increase the income tax for income over 400,000 dollars a year.

(NTB / Nettavisen)

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