In the United States, the amount of debt the government can have is limited, and Congress must authorize any increase. Republicans have a majority in the House of Representatives and sell dearly. House Speaker Kevin McCarthy says “no progress” has been made in the talks and puts pressure on Democrats. “We only have so many days to fix this.”
Far solution
A solution still seems far away. In exchange for supporting a debt ceiling increase, Republicans want far-reaching tax cuts, while Democrats seek to defend President Joe Biden’s policies. Treasury Secretary Yellen calls the Republicans’ hard-line stance rash. “We are seeing the effects of recklessness, investors are reluctant to hold government debt that matures in early June. The taxpayer is paying the price for this stalemate.”
Democrats and Republicans blame each other for hitting the debt ceiling. Former President Donald Trump cut taxes, which caused a drop in revenues and Democrats spent significantly more on, among other things, the huge package of green policies Inflation Reduction Act. Yellen: “Every day Congress does nothing, we experience higher economic costs that slow down our economy.”