Here are some questions and answers on the situation.
But -- take a breath -- the phrase technically refers to a bunch of accounting workarounds. Yes, accounting.
What could be worrisome is not the existence of extraordinary measures, but what happens if they are exhausted this summer without a deal in place. Economists have warned that By suspending the payments, the government can reduce the amount of outstanding debt. That enables the Treasury Department to keep financing government operations, according to Yellen’s letter.No dispute there. Congress has given Treasury the authority to do so.
Since then, a tool created to make it easier for the government to function has become a source of dysfunction, stoking partisan warfare and creating economic risk as the debt has increased in size over the past 20 years.It looks alarming -- and it’s not clear how Biden, McCarthy and the Democratic Senate will find common ground.
The Biden administration wants the borrowing cap increased without any preconditions. White House press secretary Karine Jean-Pierre on Tuesday ruled out holding talks with McCarthy.The Congressional Budget Office estimates that annual budget deficits will grow from roughly $1 trillion to more than $2 trillion over the next 10 years.
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