US Congressman Don Bacon (R-Neb.) has said the possibility that the United States defaulting on its national debt is a “real threat” as lawmakers grapple with a fast-approaching breach of the debt limit.
“I think it is a real threat that both sides have to take serious,” Bacon said ABC News on Sunday, The Hill reported.
US Treasury Secretary Janet Yellen said on Friday the United States will likely hit the $31.4 trillion statutory debt limit on January 19. She pledged to take “extraordinary measures” to fend off a default which has set the table for a showdown between the Biden White House, Democrats in the Senate and a Republican-controlled House.
"Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations," Yellen said in a letter to new Republican House of Representatives Speaker Kevin McCarthy and other congressional leaders, Reuters reported.
Democrats want to quickly pass debt limit legislation, but House Republicans are adamant that they will not cooperate without major spending cuts.
“The Republicans were largely elected to get control of reckless spending,” Bacon said. “On our side we have to realize… we can’t get everything we want either. I want our side to negotiate with the Democrats in good faith.”
House Republicans have put together a plan on what the Treasury should do if the United States does come up against its debt limit, the Washington Post reported. They threatened to use the debt ceiling as leverage to demand spending cuts from Democrats and the Biden administration
Democrats have pressured Republicans to negotiate quickly to avoid a “disastrous” default on the national debt.
Yellen has also called on lawmakers to act quickly to raise the debt ceiling to "protect the full faith and credit" of the United States.
"While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government's obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June," Yellen said in the letter.
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