U.S. Treasury Secretary Janet Yellen said the deadline for raising the debt ceiling was Dec. 15 compared to Dec. 3 originally expected.
The 12 -day extension will give Congress more time to reach an agreement on whether to raise the debt ceiling or postpone it.
If U.S. lawmakers fail to do so before that date, the U.S. government may suffer a ‘default’.
In a letter sent to House Speaker Nancy Pelosi, Yellen explained the latest estimates were part of the outcome of President Joe Biden's $ 1 trillion infrastructure plan.
According to him, from the Infrastructure and Employment Investment Act signed by Biden yesterday, the funds should be transferred into the Highway Trust Fund within a month after the enactment of the law and the transfer will be completed on December 15.
While he is confident that the Treasury will be able to fund the U.S. government until December 15, there is a scenario where the Treasury does not have enough funds to continue to fund U.S. government operations after this date.
Yellen expects the ‘default’ will lead to a recession and affect the role of the US dollar as the world’s reserve currency.
