The US government is paying off debt that has not been paid for two weeks if lawmakers do not act raise federal limits by borrowing and enabling the Treasury department to repay what the government has already approved by Congress.
Secretary of Treasure Janet Yellen said was warned that failure to meet these obligations leads to “disaster”, financial instability and financial ruin as borrowing rates soar and debt shortages in the US began.
Chuck Schumer, a Senate leader, told lawmakers in the Democratic Republic of America on Monday to raise money to raise debt repayment at the president’s desk over the weekend. But it is unclear how this will happen, given Mitch McConnell, the youngest member of the Senate in the Republican Republic, is strongly opposed to raising the lending limits.
With the problem of the approaching US embassy, here is a guide to how the idea can still be presented and emergency plans in case the errors occur.
What are the legal alternatives for Congress?
The House of Representatives led by Democrats provided answers last week on a possible party vote come in with a loan and avoid instability. But Republicans in the Senate have used the filibuster – a process that requires legislation to be supported by at least 10 Republican cinemas – to prevent Democrats from donating the same money to the general public in the upper room of Congress.
Instead, Republicans have called on Democrats to use reconciliation, a more complex and time-consuming process, to end 60 votes. But Democrats in Capitol Hill and the White House say reconciliation is impossible. This has left lawmakers at a disadvantage, with both parties hoping the other side will forget.
Another great way is to pay off all debts, which Yellen told counselors last week to help her. This is an idea that some well-known economists, including several former Treasury secretaries, though many legal experts believe would do so would require the approval of all Congress chambers, including 60 cinemas and inclusive.
Is there anything Biden can do on his own?
The seventh amendment to the U.S. Constitution, which was enacted in 1868 after the civil war, also includes a section on public debt, stating: “The legitimacy of public debt in the United States, legally recognized… Will not be questioned.”
Some legal experts have suggested that the President could raise personal debt. But some legal experts disagree, and former presidents, including Barack Obama, have denied the allegations.
If Joe Biden takes one side, he could open a White House for a number of legal issues.
Does Yellen need mint money for $ 1tn?
Another way to avoid dishonesty is to have Treasure pay $ 1tn platinum, deposit it in the Treasury account in the Federal Reserve and then use the money to meet the needs, not just increase the debt.
U.S. law gives Yellen the opportunity to do so and a number of lawmakers and financial experts will be involved. But the strangeness of the idea has affected many politicians. In addition, there are other concerns about what could happen if the government were able to spend money without borrowing through the Treasure market or through taxes.
The $ 1tn investment does not seem to be funded by the Secretary of Treasure.
Asked about this by members of Parliament last week, he said: “I believe that the only way to solve debt by Congress is to expand and show the world, the financial markets and the people that we are a country that will pay our debts once we get them.”
What can the Treasury do if legislators do not increase this debt?
If Congress fails to take action and the debt cannot be raised, Treasurers will be forced to decide what to do with what is expected to be paid.
The department has already established “special measures” for lawmakers to form a coalition agreement, including funding for some retirement and health organizations.
The failure could force the Treasury to move forward, and prioritize more payments than others – a task that the Bipartisan Policy Center said would “be difficult”.
This could mean choosing to pay for social security, Medicare or security-related costs, for example, by delaying the salaries of government employees.
“Such an approach could include sorting and sorting at hundreds of salaries per month, extending financial limits to the Treasure department and forcing branch managers to select winners and losers through programs approved by lawmakers,” Washington-think tank said in a recent report.
One goal is for the Treasury to prioritize capital payments and interest on federal debt in order to alleviate the financial market crisis. However, delays in paying off other debts could lead to legal problems, according to Wendy Edelberg and Louise Sheiner at Brookings Institution.
What is in the Fed’s emergency game book?
While Fed Chairman Jay Powell recently said the U.S. central bank has reduced its ability to “fully protect” the financial or financial markets from irreversible losses, notes on previous debt crisis meetings in 2011 and 2013 show Feeding by considering a number of ways to help collapse.
Officials at the time assisted the Fed in securing the Unrealized Asset as part of a program to reduce property sales and allow market participants to send securities as collateral for loans. Redemption services were also discussed to help deal with the financial market crisis.
Another strong idea about the Fed immediately buying unprotected securities and selling what they had was criticized by regulators in 2013. Then-Ambassador Powell responded to the “disgusting” approach.
“The workplace risks can be huge,” he said at an October 2013 conference.