The world may be edging towards a massive economic crisis as the United States of America is in big trouble right now.
According to top US Treasury Secretary Jannet Yellen, the US federal government could run short of money to pay bills in June this year unless the debt ceiling is raised soon.
“Given the current projections, Congress must act as soon as possible to increase or suspend the debt limit in a way that provides longer-term certainty that the government will continue to make its payments,” Yellen wrote in a letter to House Speaker Kevin McCarthy, R-Calif.
The estimate raised the risk that the United States is headed for an unprecedented default that would shake the global economy.
Following this US President Joe Biden invited four top congressional leaders to the White House on 9 May to tide over the imminent crisis.
Biden has invited Republican House Speaker Kevin McCarthy, House Democratic Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer, and Republican Leader Mitch McConnell.
House Republicans are demanding deep spending cuts and other policy changes in exchange for raising the debt limit.
But Biden has steadfastly said he will not negotiate over the debt ceiling increase but will discuss budget cuts after a new limit is passed. Congress has often paired debt-ceiling increases with other budget and spending measures.
In 2011, a similar debt ceiling fight took the country to the brink of default and prompted a downgrade of the country’s top-notch credit rating.
Nonetheless, the US’s debt ceiling battles are likely to persist for years to come, with benefit programs like Social Security and Medicare accounting for the largest category of the budget and projected to grow dramatically as the population ages.