- Discord seen as online home for renegades
- US forecasts severe solar storm starting Thursday
- Ratan Tata: Indian mogul who built a global powerhouse
- One dead as storm Kirk tears through Spain, Portugal, France
- Indian business titan Ratan Tata dead at 86
- Fed minutes highlight divisions over rate cut decision
- Steve McQueen debuts new WWII film at London festival
- Nobel winners hope protein work will spur 'incredible' breakthroughs
- What are proteins again? Nobel-winning chemistry explained
- AI steps into science limelight with Nobel wins
- Overshooting 1.5C risks 'irreversible' climate impact: study
- Demis Hassabis, from chess prodigy to Nobel-winning AI pioneer
- Global stocks diverge as Chinese shares tumble
- Time runs out in Florida to flee Hurricane Milton
- Chad issues warning ahead of more devastating floods
- Creator's death no bar to new 'Dragon Ball' products
- Chinese stocks tumble on lack of fresh stimulus
- Trio wins chemistry Nobel for protein design, prediction
- Braving war: Lebanon's 'badass' airline defies odds
- US weighs Google breakup in landmark trial
- Chinese stocks tumble on stimulus upset, Asia tracks Wall St higher
- 7-Eleven owner confirms new takeover offer from Couche-Tard
- A US climate scientist sees hurricane Helene's devastation firsthand
- Can carbon credits help close coal plants?
- Boeing suspends negotiations with striking workers
- 7-Eleven owner's shares spike on report of new buyout offer
- Your 'local everything': what 7-Eleven buyout battle means for Japan
- AI-aided research, new materials eyed for Nobel Chemistry Prize
- The US economy is solid: Why are voters gloomy?
- Scientists sound AI alarm after winning physics Nobel
- Nobel-winning physicist 'unnerved' by AI technology he helped create
- Trump secretly sent Covid tests to Putin: Bob Woodward book
- Neural networks, machine learning? Nobel-winning AI science explained
- Boeing delivers 27 MAX jets in September despite strike
- Stock markets diverge as Hong Kong sinks, oil prices fall
- US trade gap narrowest in five months as imports slip
- Stay and 'you are going to die': Florida braces for next hurricane
- Geoffrey Hinton, soft-spoken godfather of AI
- Duo wins Physics Nobel for 'foundational' AI breakthroughs
- German 'Maddie' suspect could be free in 2025 after cleared of separate sex crimes
- China slaps provisional tariffs on EU brandy imports
- Duo wins Physics Nobel for key breakthroughs in AI
- German 'Maddie' suspect could be free soon after cleared of separate sex crimes
- China says to take anti-dumping measures against EU brandy imports
- China stocks rally fizzles on stimulus worries amid Asia retreat
- China stocks rally peters out on stimulus worries amid Asia retreat
- Taiwan's Foxconn says building world's largest 'superchip' plant
- Nobel literature jury may go for non-Western writer
- From Bolivia to Indonesia, deforestation continues apace
- China holds off on fresh stimulus but 'confident' will hit growth target
US takes 'extraordinary' steps to avoid looming default
The US Treasury began taking measures Thursday to prevent a default on government debt, as Congress heads towards a high-stakes clash between Democrats and Republicans over raising the borrowing limit.
Such "extraordinary measures" can help reduce the amount of outstanding debt subject to the limit, currently set at $31.4 trillion, but the Treasury has warned that the tools would only help for a limited time -- likely not longer than six months.
"I respectfully urge Congress to act promptly to protect the full faith and credit of the United States," said Treasury Secretary Janet Yellen in a letter to Congressional leadership on Thursday.
She said last week that "failure to meet the government's obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability."
A default would harm US credibility, and JPMorgan Chase Chief Executive Jamie Dimon cautioned Thursday that "we should never question the creditworthiness of the United States government."
"That is sacrosanct. It should never happen," he said in an interview with CNBC.
- 'Risky and dangerous' -
The world's biggest economy could face severe disruption with Republicans threatening to refuse the usual annual rubber stamping of a rise in the legal borrowing limit, and this could push the United States into default.
Far-right Republicans, who now hold key power in the party's narrow majority in the House, want Democratic President Joe Biden to agree to slash government spending.
They argue that radical cuts are needed to reduce borrowing, which Congress has generally agreed to increase each year -- raising the so-called debt ceiling.
But the White House has said such cuts would have to come from key social security and military spending programs, or involve major new taxes.
The White House also vowed that Biden would not negotiate with hardline Republicans over their "risky and dangerous" opposition to increasing the limit.
- 'Rancorous politics' -
For now, the Treasury Department said it would be unable to fully invest a portion of the Civil Service Retirement and Disability Fund, with a "debt issuance suspension period" to last until early June.
Treasury will also halt additional investments of amounts credited to the Postal Service Retiree Health Benefits Fund, Yellen said in announcing the latest actions.
As the debt ceiling approaches, Treasury will start to draw down its cash balances and turn to accounting techniques and tools to allow the government to continue its functions, said Mickey Levy of Berenberg Capital Markets.
But he believes the probability of a government default on its debt is close to zero.
"I think ultimately... there will be an agreement to raise the debt ceiling but between now and then, there's going to be a lot of debate and rancorous politics," Levy told AFP.
If things stand as they are however, spending will keep rising and increasing debt, he said, adding that a large part goes to entitlement programs such as social security and Medicare.
"The political appetite to really address these programs is just not there," he said.
D.Philippon--CPN