Washington, Jun 13 (EFE).- US Treasury Secretary Janet Yellen on Tuesday said that the recent agreement between Democrats and Republicans to raise the debt ceiling was reached “at the last minute,” just days before the date on which the government would have exhausted its available cash to pay current and scheduled debts.
“While we were able to avoid default, the United States – once again – came dangerously close to the line. This cannot be normalized as the way we do business in Washington,” said Yellen in her annual appearance before the House Financial Services Committee.
According to the Treasury secretary, “waiting until the last minute hurts our global leadership and credibility on the world stage.”
“We’re a nation that keeps our word and pays our bills, and we should never give anyone reason to think otherwise,” said the Treasury secretary, going on to hail the fact that under the administration of Democratic President Joe Biden Congress acted to deal with the situation in time.
The agreement to raise the US debt ceiling in exchange for caps in certain areas of public spending was achieved between the administration and House Republicans led by Speaker Kevin McCarthy in late May in a race against the clock to strike a deal on the matter before the US exhausted its available cash.
Biden signed the debt ceiling increase bill on June 2, three days before the Treasury had calculated that US cash reserves would have run out and the government would have had to suspend payment on its outstanding debts as well as its upcoming obligations such as Social Security payments, military salaries, Medicare payments and many more.
In contrast to most nations, the US can only borrow up to the limit established by Congress – the figure known as the debt ceiling – and renewed legislative agreement is required each time the country needs to raise the debt limit to be able to continue paying its financial obligations.