Lingering debt ceiling crisis reflects systematic defects

US Treasury Secretary Janet Yellen has warned of a "constitutional crisis" if Congress fails to raise the $31.4 trillion debt ceiling as soon as possible. She was talking to an ABC News program on May 7.

Considering that she was supposed to be on her way to Japan for the G7 meeting on Thursday, the temporary postponement seems to underline the seriousness of the "debt ceiling crisis".

In fact, the US' current debt ceiling was reached in early January, but the convention allows Congress to debate it for a while. In January, Yellen wrote to Congress saying the Treasury Department had begun taking "extraordinary measures" to avoid a default on the government's debt.

On May 1, Yellen sent another letter to Congress urging action "as soon as possible" to raise the debt ceiling "without conditions". A day later, she wrote to Congress again, saying that "waiting until the last minute to suspend or raise the debt ceiling can cause serious damage to business and consumer confidence and raise short-term borrowing costs for taxpayers".

The United States imposes a mandatory legal cap on the amount of debt the government can borrow, equivalent to about 120 percent of the GDP, and the federal fiscal borrowing account is frozen if the limit is not raised in time.

That means the US will no longer be able to borrow to pay government employees and military personnel, meet social security checks or other payments to defense contractors. A default on the US government's debt can also upend the global financial market and undermine global trust in the US. Many experts warn that a default on debts could plunge the US into a recession, rendering millions of people jobless and driving up payments on household mortgages, car loans and credit cards.

Since 1960 the US has hit its debt ceiling a staggering 78 times without it leading to a situation where it cannot borrow again.

The Republicans have proposed spending cuts in exchange for raising the borrowing limit, but US President Joe Biden and the Democrats have urged Congress to pass a "clean" debt ceiling increase without conditions. The bickering between the Democrats and Republicans has made little progress toward reaching an agreement.

The lingering debt ceiling showdown fully shows the inherent systematic defects in US politics.