The US government hit a $31.4 trillion borrowing limit last week amid a standoff between the Republican-controlled House of Representatives, President Joe Biden and Democratic lawmakers that could lead to a financial crisis. in a few months, analysts said.
The US Treasury Department has warned that it may not be able to pay all government bills until early June, after which the world’s largest economy could collapse due to a high risk of default, even on its debt securities.
Hardline conservative Republicans, who have the power to block any deal in the House, want to force Biden and the Democratic-led Senate to slash spending in exchange for a deal to avoid defaulting on a debt of 31.4 trillion dollars. Some moderates want to be more careful and avoid any potential damage to the US economy, but even they argue that their party will not support a debt deal without spending talks.
