US Treasury Secretary Confident Debt Ceiling Will Be Raised by Deadline in December
13:16 GMT 10.10.2021 (Updated: 14:00 GMT 10.10.2021)
The US avoided default on its debt after the Congress narrowly passed a $480 billion extension to the debt ceiling earlier this week. The measure gave lawmakers until 3 December to negotiate a more permanent solution to the debt problem.
US Secretary of the Treasury Janet Yellen has expressed confidence that congresspeople will be able to negotiate a debt ceiling rise by 3 December – the date after which the US Treasury runs out of money. Yellen stressed in an interview with ABC News that it was lawmakers' "responsibility" to raise the debt limit.
"Once Congress and the administration have decided on spending plans and tax plans, it's simply their responsibility to pay the bills that result from that. It's a housekeeping chore. Because really, we should be debating the government's fiscal policy".
The Treasury secretary noted that the debt ceiling increase should be negotiated after the Congress and the White House settle on spending plans for the next fiscal year. So far, not only have the Democratic and the Republican Parties been unable to agree on next year's budget, but the Democrats are still arguing what the budget bill should look like among themselves.
The key points of contention are provisions of Joe Biden's ambitions reforms that could cost as much as $3.5 trillion – the moderate and progressive Democrats are arguing over which welfare programmes should make it into the budget, and which should be cut out. Yellen noted in her interview that there had been an argument over tying some of the benefits in the bill to income level.
8 October 2021, 19:14 GMT
Yellen also suggested that the Congress will include a freshly negotiated recommended minimum corporate tax rate of 15% in the text of next fiscal year's budget bill.
The comments of the Treasury secretary come in the wake of the US Congress narrowly passing a motion on 7 October to raise the debt ceiling by a $480 billion so that the country can continue to pay its obligations past 16 October. The Republicans strongly opposed the move, stressing that they won't be responsible for raising the limit to pay for the Democrats' extremely expensive programmes. Yellen warned ahead of the extension that failure to raise the limit would result in dire economic consequences for the American economy.