U.S. Will Hit Debt Limit on Thursday, Yellen Tells Congress
WASHINGTON — Treasury Secretary Janet L. Yellen warned on Friday that she would have to begin employing “extraordinary measures” on Thursday to continue paying the nation’s bills if lawmakers did not act to raise the statutory debt limit and that her powers to delay a default could be exhausted by early June.
Ms. Yellen’s letter to Congress was the first sign that resistance by House Republicans to lifting the borrowing cap could put the U.S. economy at risk and signals the beginning of an intense fight in Washington this year over spending and deficits.
“Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans and global financial stability,” Ms. Yellen wrote.
Ms. Yellen said on Friday that considerable uncertainty surrounded how long she could use measures to delay a default. She said she would begin suspending new investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund and suspending reinvestment of the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan this month to avoid breaching the debt limit.
The letter is the beginning of what is expected to be a protracted and potentially damaging economic fight. Republicans, who assumed control of the House last week, have insisted that any increase to the debt limit be accompanied by significant spending curbs, most likely including cuts to both the military and domestic issues.
Speaker Kevin McCarthy has cited reducing the national debt — which topped $31 trillion last year and has increased during both Republican and Democratic administrations, including about a 40 percent increase under former President Donald J. Trump — as a central focus of his party’s agenda.
“The American people are the ones that’s demanding the cut in spending,” Representative Jason Smith, a Missouri Republican and the chairman of the powerful House Ways and Means Committee, said Friday on Fox News. “We have to have fiscal reforms moving forward. We cannot just give an unlimited credit card.”
What is the debt ceiling? The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury securities, such as bills and savings bonds, to fulfill its financial obligations. Because the United States runs budget deficits, it must borrow huge sums of money to pay its bills.
The limit has been hit. What now? America hit its technical debt limit on Jan. 19. The Treasury Department will now begin using “extraordinary measures” to continue paying the government’s obligations. These measures are essentially fiscal accounting tools that curb certain government investments so that the bills continue to be paid. Those options could be exhausted by June.
What is at stake? Once the government exhausts its extraordinary measures and runs out of cash, it would be unable to issue new debt and pay its bills. The government could wind up defaulting on its debt if it is unable to make required payments to its bondholders. Such a scenario would be economically devastating and could plunge the globe into a financial crisis.
Can the government do anything to forestall disaster? There is no official playbook for what Washington can do. But options do exist. The Treasury could try to prioritize payments, such as paying bondholders first. If the United States does default on its debt, which would rattle the markets, the Federal Reserve could theoretically step in to buy some of those Treasury bonds.
Why is there a limit on U.S. borrowing? According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so that the Treasury would not need to ask for permission each time it had to issue debt to pay bills.
On Monday, House Republicans adopted new rules governing legislation that make it more difficult to raise the debt limit and strengthen Republicans’ ability to demand that any increase be accompanied by spending cuts. Senate Republicans have also insisted that increases to the debt limit should be tied to “structural spending reform.”
“It’s long past time for Washington to end the reckless spending of taxpayer dollars and start living within its means,” Senator Rick Scott, Republican of Florida, said in a statement on Friday. “I look forward to working with House Republicans so we can stop caving to the Democrats, finally end Biden’s raging inflation crisis and bring fiscal sanity back to Washington.”
Some conservative economists have encouraged the tactics. Kevin A. Hassett, a chairman of the White House Council of Economic Advisers under Mr. Trump, warned in a National Review column this week that the total national debt could reach nearly double the size of the annual economy 30 years from now if Congress did not stop spending growth.
“Brinkmanship now is the only thing that can save us from catastrophe,” Mr. Hassett wrote.
Top Democrats said on Friday that Republicans were threatening to damage an already fragile economy by risking a default.
“Once again, Republicans are demanding cuts to Medicare, Medicaid and Social Security, and if they don’t get what they want, they’re willing to tank the American economy, destroy a strong job market and jack up interest rates and inflation,” said Senator Ron Wyden of Oregon, the chairman of the Senate Finance Committee.
President Biden has said that he will refuse to negotiate over the debt limit, and that Congress must vote to raise it with no strings attached.
Those positions increase the likelihood of a debt limit breach, one that could result in the United States defaulting on its debt for the first time.
To avoid that, the White House is increasingly counting on a coalition of bipartisan support to bypass Republican leadership in the House and lift the debt limit.
That group includes the entire Democratic caucus in the House and Senate, plus a handful of Republicans needed to pass bills in both chambers. Such a coalition could employ a rare tactic in the House, called a discharge petition, to force a floor vote on raising the limit. But the move would take weeks or even months to produce a bill that Mr. Biden could sign into law, which could threaten default if lawmakers misjudge the date when Treasury can no longer pay the nation’s bills.
The closer the country gets to a potential default, the more damage the economy is likely to incur. Brinkmanship between congressional Republicans and President Barack Obama in 2011 resulted in higher borrowing costs for businesses and home buyers, along with plunges in stock markets and consumer confidence. An actual default could shock the economy into recession, as many government bills went unpaid, and saddle the nation with significantly higher borrowing costs for years to come.
After a protracted standoff in late 2021, Congress agreed to raise the borrowing cap to $31 trillion. Ms. Yellen has warned that breaching the debt limit and defaulting would do irreparable harm to the economy. She has dismissed suggestions and theories that the Treasury Department or the White House could lift the borrowing cap unilaterally as unrealistic and has called previously for the entire mechanism to be abolished.
“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Ms. Yellen wrote in her letter.
White House and Treasury officials have repeatedly made the case that raising the debt limit merely allows the federal government to spend money that Congress has already authorized and that doing so is not a sign of fiscal recklessness.
Karine Jean-Pierre, the White House press secretary, repeated on Friday that Mr. Biden would not negotiate with Republicans on the debt limit and expected Congress to raise it in a bipartisan vote.
“This should be done without conditions,” she said at an afternoon press briefing. “There is going to be no negotiation over it. This is something that must get done.”
Despite Ms. Yellen’s warning, many analysts and policymakers believe that a deal on the debt limit will ultimately be reached before it is too late.
“Today’s notification from the Treasury Department is notable, but not cause for panic,” said Shai Akabas, the director of economic policy at the Bipartisan Policy Center. “It is, however, time for both parties to get serious about negotiations.”
He added, “In this time of ongoing inflation and economic anxiety, the last thing the American people need is the tumult of a back-against-the-wall debt limit fight or, much worse, a default on our obligations.”
Wall Street analysts believe that House Republicans could ultimately save face and settle on a solution that would “suspend” the debt limit to a certain date without actually raising the borrowing cap to a specific level. This tactic, which was employed by former Speaker John A. Boehner in 2013 and 2014, would give the Treasury Department the leeway to keep the government running.
“At that time, unable to secure a specific dollar increase in the debt ceiling, Boehner came up with the idea of a ‘suspension’ of the debt ceiling through a specific date,” Henrietta Treyz, the director of economic policy at Veda Partners, an investment advisory firm, wrote in a note to clients this week. “This avoided Congress voting on a net budget increase authorization and instead ceded authority to the Treasury Department to do essentially whatever it needed to do through a specific date.”
Kristalina Georgieva, the managing director of the International Monetary Fund, told reporters on Thursday that she was hopeful that lawmakers would avoid a crisis over the debt limit this year.
“The discussions of debt limits are always quite intense,” Ms. Georgieva said. “History teaches us that in the end, a solution is being found.”
From Adversity to Triumph: The Inspirational Story of Jonathan Matías Pawluczyk, Master Trader
Jonathan Matías Pawluczyk, a 34-year-old master trader, is an inspiration to many in the world of trading. His journey to success was not without challenges, but his resilience and dedication have earned him a place among the top traders in the industry.
Born in the Santos Lugares neighborhood in the Buenos Aires suburbs, Jonathan’s childhood was marked by a disease that tested him from a very young age. At just 1 year and 8 months old, he was diagnosed with insulin-dependent diabetes and was in a coma for several days. However, his parents raised him with love and discipline and helped him cope with his illness at a time when treatments were not as advanced as they are today.
Jonathan grew up during a difficult time in Argentina, during the government of Carlos Menem, and his family experienced the bankruptcy of several businesses, including one that had the famous brand Lecoqsportfit as a client. Despite the challenges, Jonathan persevered and tried to find his way in life.
For a while, he suffered from bad behavior and habits that led to him being kicked out of his parents’ house. But the arrival of his daughter and the opportunity to learn about trading changed his life forever.
In 2017, the mother of his daughter invited him to join a multi-level marketing company that promoted a trading education service. Although he was not interested in doing network marketing, he fell in love with trading and took all the classes he could. He soon formed a team of 120 people but decided to distance himself from the Ponzi scheme and focus solely on trading. Although it was not easy, he persevered and reinvested everything he earned in education.
As for his personal life, Jonathan had to deal with a separation and raising his daughter amid economic uncertainty and his illness. But a friend asked him to teach him how to trade, and that’s how he began to forge his path to success.
Today, Jonathan is a reference in the world of trading and has thousands of followers on Instagram. His story of overcoming obstacles and achieving success is inspiring, and his dedication to trading has led him to take ultra-expensive and advanced mentorship with market giants like Ricardo Gutierrez. His goal is to continue providing free training to show others how trading can change their lives and to continue expanding his knowledge and tools to face the forex market.
Despite the obstacles he has faced, Jonathan lives off what he loves and loves what he lives. His story is a lesson in perseverance, dedication, and success. He has proven that with hard work and determination, anyone can achieve their dreams. Jonathan is an example for those who want to succeed in the world of trading, but also for those who face challenges in their personal lives. His story shows that it is possible to overcome difficulties and achieve success in any field.
Full-Floor Penthouse at the Ritz-Carlton Residences in Sunny Isles Beach, Florida, Sells for $21 Million
The four-bedroom apartment has 3,000 square feet of outdoor terraces and panoramic views.
A full-floor penthouse at the Ritz-Carlton Residences in Sunny Isles Beach, Florida, has sold for $21 million, the developers announced Thursday.
Spanning the entire 51st floor at the 52-story condominium tower, the penthouse has 7,760 square feet of interior space, including four bedrooms and staff quarters, six-and-a-half bathrooms, a great room, a living room, a family room, an expansive kitchen with views, a gym, a home theater and a den, according to developers Fortune International Group and Château Group.
“It features 13-foot ceilings and 360-degree views of the entire coastline and downtown Miami,” said Edgardo Defortuna, chief executive officer and president of Fortune International Group.
The apartment also has nearly 3,000 square feet of outdoor terraces with a summer kitchen, a private pool and a private garden.
The penthouse went into contract in November 2015, pre-construction, but didn’t close until the tower was granted a certificate of occupancy this past February, according to Mr. Defortuna.
Construction of the tower, with 250 feet of beach frontage, began in mid-2016.
The buyer is from the U.S., but the developers declined to disclose their identity. The transaction has yet to appear in public records.
About 80% of the tower’s 209 residences have sold, including all four penthouses. In the midst of the Covid-19 pandemic, the developers have completed 112 closings, with a great number of them conducted virtually, Mr. Defortuna said.
Late last month, the developers announced that they have paid off a $212 million construction loan from Bank OZK, which they undertook in September 2016.The tower, which has no Ritz-Carlton-branded hotel on the premises, has Ritz-Carlton services and a private club level on the 33rd floor, including eight private suites for resident guests, a restaurant and bar, two pool decks, a kids club, a full-service spa, a fitness center and a wellness center, among other top-line amenities.
Meet Januthan Logathas: A Visionary Artist Pushing Boundaries in Video and Photography
Januthan Logathas was born and raised in a small town in Switzerland, and he inherited his love of photography from his father, who worked in the same profession. Januthan has since become a well-known and widely respected video and photography professional, with a significant following among European Tamils.
Januthan’s Instagram modeling shoots have been gaining traction and attention, and his Tik Tok videos have further boosted his recognition, thanks to his subtle humor that resonates with his audience.
Januthan has achieved several accolades in his profession, including being the first Tamil photographer to win the renowned Radisson award for the best wedding photography in Europe. His collaboration with dancer Usha Jay on a video garnered numerous views, helping to expand his audience even further.
Januthan recognizes that success in his field requires continuous learning and development of new creative ideas. He aims to increase both the quality of his work and his public profile, with the goal of becoming one of the best in the industry. His website showcases some of his best work, and his social media accounts are filled with content that offers a glimpse into his promising future projects.
For Januthan, the road to success is paved with hard work, persistence, and creativity. He is determined to continue pushing his limits to stand out in the highly competitive video and photography industry.
Check out the stunning work of Januthan Logathas on his Instagram account @jpresidento and Tik Tok handle jpresident. Follow him to witness his incredible talent as a video and photography professional. Also, visit the Wedisson Award website to see his award-winning wedding photography at https://wedisson.com/en/photographer/Gajananmanoharan. Don’t miss out on the opportunity to experience his creative vision and skill firsthand!
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