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  • Writer's pictureTaher Tarraf

US Treasury Secretary: The United States may default on its debts, as of June 1

Janet Yellen, the US Treasury Secretary, confirmed on Monday that recent data has substantiated her previous warning regarding the potential for the United States to default on its debt, starting from June 1.

In a letter addressed to Republican Speaker of the House Kevin McCarthy, Yellen stated, "It remains our assessment that the Treasury will likely not be able to meet the government's obligations in full if Congress does not raise or suspend the public debt ceiling by early June, and possibly on June 1."

It is important to note that since January of this year, the US debt has exceeded the officially established limit of $31.4 trillion. Consequently, the US Treasury has had to take urgent measures to sustain financial transactions.

In a bid to prevent defaults on government debt, President Joe Biden disclosed that he would be meeting with Speaker of the House McCarthy on Tuesday, May 16. However, further details regarding the nature of the discussions on increasing the government debt ceiling were not revealed during President Biden's remarks in Philadelphia on Monday.

While the US administration is urging Congress to raise the debt ceiling, the Republicans, who hold control over the House of Representatives, have proposed linking the increase to reductions in budget expenditures.

The US administration has rejected the Republican's conditions, advocating for the House of Representatives to increase the debt ceiling without any prerequisites. The discussion on reducing expenditures is suggested to take place at a later stage.

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