US on the brink of collapse: ‘A meteor is going to crash into our economy,’ says Biden

If the secretary’s warnings Janet Yellen are filled, the treasure from United States is two weeks away from the fault (the country has a $ 28 trillion in debt) for the first time in its history. In the CongressMeanwhile, the struggle between decree and republicans to expand the debt ceiling it remains tense and for the moment the signals remain unclear.

“What they are doing is very reckless and dangerous,” said the President Joe biden on Republicans. “A meteor is about to crash into our economy. Democrats are prepared to do anything to stop it. Republicans just have to let us do our job. “

Biden and the fault: the hourglass that was already activated in Congress

Even if Wall Street hopes that ultimately lawmakers can come to an agreement to avoid the fault -and the potential “catastrophic events” and “devastating consequences”, which predict Yellen and the holder of Federal Reserve, Jay Powell– This does not mean that the country will not be penalized by a late agreement: analysts of Morgan stanley predicts that unless a resolution is reached by the end of next week, the treasure letters ripening in October, they can lose value “quickly”.

“Let me be clear about the task ahead: we need to bring a bill to the president’s table that addresses the debt limit for the weekend. Period, ”wrote the majority leader today in the Senate, Chuck schumer. “The consequences of even getting closer to this day X [en referencia al 18 de octubre] could be disastrous for our economy and devastating for American families, ”he added.

For now, the republicans they are steadfast and unwilling to cooperate. Mitch mcconnell, the leader of the Republican bloc in Senatestated in a letter that “the bipartisanship The president is not a switch [de la Cmara de Representantes] Pelosi and Schumer they can turn to borrow money and spend it, ”he said and added:“For two and a half months, we have simply warned that since your party wishes to govern alone, it must also manage the debt ceiling on its own.“.

The US Treasury on the verge of default: 5 keys to understanding what’s going on

No chance to break the call obstruction‘- With the exception of a few exceptions such as appointing judges or approving the budget, all laws require a majority of 60 senators to complete debate and go to a vote, i.e. Democrats need at least 10 Republicans to deal with the project – the co-religionists of Biden They are at a crossroads.

The decree argue that the expansion of debt ceiling should be a bipartite solution, because these are also the obligations assumed during the Administrative asset. But Republicans blocked the bill again and insist Democrats solve the problem through the budget reconciliation process, which requires a simple majority – Democrats have 51 votes, including Vice President Kamala Harris– instead of two thirds. But the Democrats refuse to use the resource because they consider it risky and time consuming, since it involves the work of several committees.

United States: Treasury estimates that it will run out of liquidity in October and worries about a default

In addition, although the vote can be express, the procedure also includes a debate and this in the Congress Americans are called “vote-a-rama”: unlimited time (usually spanning several days) during which senators can propose amendments.

As William Hoagland and Steven Bell, former chairmen of the Senate Budget Committee, told Bloomberg, It would take about two weeks to raise the debt ceiling through the budget reconciliation process.

For now, it seems that the solution to the problem of debt It depends on the republicans finally change your posture and let the ceiling expand, or decree Start on reconciliation process before it’s too late.