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Raising the Debt Ceiling: A Must to Avert Economic Turmoil

Treasury Secretary Janet Yellen has emphasized the urgency of raising the debt ceiling to prevent a significant economic downturn in the United States. As per the Treasury Department’s projections, by early June, the U.S. could be unable to pay its bills unless Congress acts to raise the debt ceiling.

The Treasury Department has already employed extraordinary measures to prevent a default, but these are not sustainable solutions. Yellen has urged Congress to raise or suspend the debt ceiling to ensure the U.S. can meet its financial obligations and avoid economic chaos, which many experts agree will ensue if no action is taken.

Currently, lawmakers are at a deadlock over the matter, with the possibility of a default looming. Yellen’s call for decisive action comes as new tax receipt data prompted the Treasury Department to move up its estimate of when it may no longer be able to meet all the government’s obligations, potentially as early as June 1st. This is an earlier date than Wall Street economists had anticipated.

President Joe Biden has invited the “big four” congressional leaders—Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Speaker Kevin McCarthy, and House Democratic Leader Hakeem Jeffries—to a meeting at the White House on May 9th to discuss the debt limit. Jeffries considers the meeting critical to finding a way forward, emphasizing the need to avoid default.

However, some lawmakers, such as Sen. James Lankford, believe that the meeting should have taken place earlier. Lankford mentioned that the issue was raised shortly after the November election, expressing disappointment over President Biden’s reluctance to negotiate.

The upcoming meeting is expected to facilitate a resolution to the debt ceiling impasse, as failing to raise the limit could lead to severe economic consequences for the United States.