# US Debt Ceiling Talks: A Simple Breakdown
The US government has a limit on how much money it can borrow to pay its bills. This limit is called the "debt ceiling." Right now, the government is close to hitting that limit. If it does, it won't be able to pay all its bills.
The Treasury Secretary, Janet Yellen, has said that the government will run out of money by June 5th if the debt ceiling isn't raised. This has given the government a bit more time to figure out a solution.
President Joe Biden is hopeful that they can come to an agreement soon. The plan being discussed would limit how much the government can spend for the next two years, except for money going to the military and veterans.
However, there are disagreements about who should be eligible for government aid. Republicans want to cut spending in exchange for raising the debt limit, while Democrats propose raising certain taxes.
If the US can't pay its bills, it could cause problems for the US economy and economies around the world. This has led to warnings from credit rating firms and the International Monetary Fund (IMF). The IMF has suggested that the debt ceiling should automatically increase when Congress approves more spending.
Negotiations are ongoing, and lawmakers have been told to be ready to come back from their Memorial Day weekend break if a deal is reached. The outcome of these talks will have a big impact on the US economy and financial markets around the world.
This could impact people in several ways. Government employees and contractors might not get paid, which could affect their ability to pay their own bills. If the government can't pay for social programs, people who rely on these programs could also be affected.
Moreover, if the US defaults on its debt, it could cause a lot of turmoil in financial markets, which could impact people's investments and retirement savings. It could also lead to higher interest rates, making everything from credit cards to mortgages more expensive for ordinary people.
In short, the debt ceiling talks are important because they could have a significant impact on the economy and people's everyday lives.
For more information, you can read the full article on [BBC News](https://www.bbc.com/news/world-us-canada-65713732).