Yellen warns that the US could reach the debt limit by December 15

The United States government could run out of money by December 15, Treasury Secretary Janet Yellen warned in a letter on Tuesday, encouraging lawmakers to increase the country’s debt limit to avoid a default.

Democrats and Republicans have argued in Washington in recent months over raising the legal debt limit.

In October, they were within days of hitting this cap before agreeing to a provisional $ 480 billion hike, which would keep the government running until Dec. 3, according to Yellen.

In a letter to the Speaker of the House of Representatives, Democrat Nancy Pelosi, the Secretary of the Treasury extended that date by about two weeks, but warned that “there are scenarios in which the Treasury would be left with insufficient remaining resources to continue financing operations. of the US government after this date ”.

“To ensure the full good faith and credit of the United States, it is critical that Congress raise or suspend the debt limit as soon as possible,” Yellen wrote.

This new deadline comes amid lengthy negotiations over President Joe Biden‘s “Build Back Better” plan, which seeks to invest $ 1.85 trillion in social services and education.

The Republican minority in Congress opposes the initiative, and has said it will not support increases in the debt ceiling to pay it, although much of the debt of the United States government comes from disbursements of funds approved by past Democratic and Republican administrations. .

In October, Republicans argued that the Democrats who run the House and Senate should raise the cap unilaterally.

The United States has never defaulted on its debt, and Treasuries play an important role in the global financial system. Economists warn that a failure to raise the debt issue limit could cause a massive financial crisis.