Treasury Secretary Janet Yellen said Tuesday that the country could default on the national debt on Dec. 15 and called on Congress to approve a debt ceiling suspension as soon as possible.
In a letter to Congress, Yellen explained that she had revised those initial estimates following the passage of a $1.2 trillion legislative package for the nation’s infrastructure and had concluded that the government will have enough money until Dec. 15.
However, she warned that the cash flow the Executive has at its disposal is subject to “unavoidable variability,” so that date could change again.
“To ensure the full faith and credit of the United States, it is critical that Congress raise or suspend the debt limit as soon as possible,” Yellen argued, despite the high rate of 5.4% inflation accumulated in the last 12 months.
While the Treasury Secretary advocates continuing to increase the country’s debt capacity, the U.S. economy is facing the highest inflation in 30 years, which has drastically devalued the dollar.
So far, there has been no progress in the negotiations between Democrats and Republicans to ensure that the federal government can continue to pay its debts in December by increasing monetary issuance.