By Andrea Shalal
NIIGATA, Japan, May 13 (Reuters) - Treasury Secretary
Janet Yellen on Saturday called the showdown over raising the
U.S. debt ceiling "more difficult" than in the past but said she
remained hopeful a solution could be found to avert a first ever
U.S. default
Yellen told Reuters in an interview on the sidelines of a
meeting of Group of Seven finance officials in Japan that she
hoped to update the U.S. Congress within the next couple of
weeks about when exactly Treasury would run out of funds to pay
the government's bills.
She has called repeatedly for Congress to agree to raise the
$31.4 trillion cap on federal borrowing to avert the "economic
and financial catastrophe" that would ensue if the United States
defaulted on its debts.
Last week, she told lawmakers that Treasury could run out of
money to pay all the government's bills as early as June 1 - and
likely in early June - unless Congress raised the debt limit.
She offered no update on Saturday.
President Joe Biden, a Democrat, insists Congress has a
constitutional duty to raise the ceiling without conditions to
fund previously approved spending. Republicans, who control the
House of Representatives, have tied their agreement to increase
the cap to sweeping budget cuts.
Unlike most developed countries, the U.S. sets a ceiling on
how much it can borrow. Because the government spends more than
it takes in, lawmakers must periodically raise that cap.
Yellen said the first major standoff over the debt ceiling
since 2011 reflected continuing U.S. polarisation after the
presidency of Donald Trump and raised concerns about U.S.
relationships and standing in the world.
"It’s certainly not a positive for relationships and
standing in the world and credibility," she said. "Maybe this
time is more difficult, but I'm hopeful that this one will end
in the same way others have, namely that we will find a
solution. That’s what we’re focussed on."
Yellen said it was a positive sign that "pretty much
everyone" who attended a meeting Biden hosted with congressional
leaders on Tuesday had agreed it would be unacceptable for the
United States to default.
She said Biden was planning on attending the G7 summit
starting on Friday in Hiroshima and viewed it as a priority, but
noted he has said he could cancel the trip if there was not
sufficient progress on ending the debt ceiling impasse.
Despite concern over the debt ceiling fight, Yellen said she
remained convinced that the Biden administration had
re-established U.S. leadership in the world and other G7 leaders
were grateful that they had turned "the dial 180 degrees
relative to the Trump administration."
(Reporting by Andrea Shalal in Niigata; Editing by William
Mallard)
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