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Specter of deficit can be avoided only by raising debt limit -- US Treasury

WASHINGTON, May 26 (KUNA) -- US Secretary of the Treasury Janet L. Yellen on Friday sent a letter to the Congressional Leadership stressing the need of raising the debt limit by June 5.
"I am writing to follow up on my previous letters regarding the debt limit and to provide additional information regarding the Treasury Department's ability to continue to finance the operations of the federal government," Secretary Yellen wrote. "Since January, I have highlighted to you the risk that Treasury would be unable to satisfy all of our obligations by early June if Congress did not raise or suspend the debt limit before that time. "In my letters, I also noted that I would continue to update Congress as more information became available.
"Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5," she cautioned.
"Yesterday we used an additional extraordinary measure that Treasury has employed in a number of past debt limit episodes: "We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States. "If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests," Yellen explained.
"I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible," she added. (end) asj.gb