The United States is facing dire financial straits and will likely run out of money by October 18th.
Treasury Secretary Janet Yellen warned that the U.S. could face a catastrophic financial collapse if lawmakers don’t agree to increase the debt ceiling. The grim warning arrived just hours after Senate Republicans shot down a bill on Monday that would have suspended the debt limit.
If no action is taken by mid-October, the United States will endure its first default in history. Social Security benefits, food stamps, child tax credits, and military pay will be threatened if the federal government cannot secure additional funding. Even more troubling is that state and local jurisdictions will no longer have access to federal funds when natural disasters and unforeseen circumstances such as the COVID-19 pandemic occur. Additionally, experts say that interest rates could spike, and stock prices could plunge drastically.
Democrats argue that the Trump administration’s $5 trillion in tax cuts and spending last year is partially to blame for the current financial crisis. This year, the $1.9 trillion American Rescue Plan contributed to the piling debt. President Biden is also pressing Congress to pass another $1 trillion infrastructure package and $3.5 trillion budget bill. The current debt ceiling sits at $28.4 trillion, while the country’s debt is currently at nearly $28 trillion.
If lawmakers cannot get on the same page by Friday, another government shutdown is possible.
