As the United States continues to grapple with the economic fallout of the COVID-19 pandemic, President Joe Biden is taking steps to avoid a potential default on the country’s debt. In recent weeks, the Biden administration has been urging Congress to raise the debt limit, warning that failure to do so could have dire consequences for the US economy.
The debt limit, also known as the debt ceiling, is a legal cap on the amount of money that the US government can borrow to finance its operations. The current limit is set at $28.4 trillion, and it must be raised periodically to allow the government to continue borrowing money to pay its bills.
If Congress fails to raise the debt limit, the US government would be unable to borrow money to pay its bills, including interest on existing debt. This could lead to a default on US debt, which would have serious consequences for the global economy.
To avoid this scenario, President Biden has called on Congress to raise the debt limit before June 2021. In a letter to congressional leaders, Treasury Secretary Janet Yellen warned that failure to raise the debt limit could cause “irreparable harm” to the US economy.
Yellen also noted that the US government has already exhausted measures to avoid default, such as suspending investments in certain government funds. This means that Congress must act quickly to raise the debt limit before it’s too late.
The Biden administration’s push to raise the debt limit has faced opposition from some Republicans in Congress, who argue that the US government should focus on reducing spending rather than increasing its borrowing. However, many economists argue that failing to raise the debt limit would be far more damaging to the economy than any short-term spending cuts.
In addition to raising the debt limit, President Biden has proposed a $2 trillion infrastructure plan that would invest in roads, bridges, and other infrastructure projects across the country. The plan would be funded in part by raising taxes on corporations and wealthy individuals.
While the infrastructure plan has faced opposition from some Republicans, it could provide a much-needed boost to the US economy and help create jobs in the wake of the pandemic.
In conclusion, President Biden’s efforts to raise the debt limit and invest in infrastructure are critical steps to ensure the long-term health of the US economy. While there may be disagreements over the best way to achieve these goals, it’s clear that action must be taken to avoid a potential default on US debt. By working together, Congress and the Biden administration can help ensure a brighter future for all Americans.
