Yellen warns of 'chaos' if US fails to raise debt ceiling

WASHINGTON, United States - US Treasury Secretary Janet Yellen warned Sunday that unless Congress acts soon to raise the nation's debt ceiling, "financial and economic chaos would ensue."

Republicans have been pressing President Joe Biden to strike a deal to provide spending cuts in exchange for lifting the national borrowing limit, but Yellen insisted the onus remains on US lawmakers.

"It simply is unacceptable for Congress to threaten economic calamity for American households and the global financial system as the cost of raising the debt ceiling," she told ABC talk show "This Week."

Yellen had warned on Monday that the United States could run out of money to pay its financial obligations as early as June 1.

The ceiling on US public debt is legally fixed and can be raised only by passage of congressional legislation signed into law by the president.

The Republican-led House of Representatives, positioning itself for a showdown with Biden, voted in late April to lift the borrowing limit but only with drastic cuts to rein in what that party sees as excessive spending.

The bill has no chance of being adopted in the Senate, with its Democratic majority.

Biden has so far refused to negotiate, noting that the debt ceiling has routinely been raised scores of times over the years -- including under former Republican president Donald Trump.

But Republicans insist Biden's refusal to talk is the principal obstacle.

"The president has refused to negotiate," Senator James Lankford, a Republican on the Senate Appropriations Committee, told ABC. "That has been the most stunning part about this."

Biden is set to meet on Tuesday with the leaders of both parties in Congress.

"I know he wants to set up a process in which spending priorities and levels are discussed," said Yellen, "but these negotiations should not take place with a gun pointed at the head of the American people."

She sidestepped questions about the possibility Biden might use a novel interpretation of the US Constitution to simply keep paying the nation's bills, saying that in the absence of congressional action, "there are simply no good options."

The impasse has raised the possibility of the country's first-ever default, with profound implications for the US and global economies.

Analysts say markets would be shaken and interest rates would lastingly rise, causing households and businesses to pull back on spending.

A default, Biden's economic advisors warn, could cause the loss of eight million jobs and send GDP plunging by six percent.

Since the United States hit its $31.4 trillion borrowing limit in January, the Treasury has taken extraordinary measures to allow it to continue financing the government's activities.

But as Yellen said Monday, those measures will soon be exhausted.

Agence France-Presse

TikTok chief faces US Congress as lawmakers mull ban

WASHINGTON — TikTok CEO Shou Zi Chew will fight for the survival of the hugely popular video-sharing app in the United States on Thursday, as he faces skeptical Washington lawmakers over the company's alleged ties to the Chinese government.

The 40-year-old Singaporean will address the powerful House Energy and Commerce Committee at 10:00 am (1400 GMT) and endure hours of serious grilling by both Republicans and Democrats who fear that Beijing could subvert the site for spying or to promote propaganda.

Tiktok, owned by Chinese company ByteDance, is under immense pressure across Western countries, with government officials in the United States, at the EU commission, as well as the UK and Canada forced to delete the app from their devices.

British broadcaster BBC on Tuesday advised its staff to remove TikTok from their phones.

TikTok's gravest threat is from the United States, where the administration of President Joe Biden has set an ultimatum that the company either dump its Chinese ownership or face an outright ban.

A ban would be an unprecedented act on a media company by the US government, cutting off 150 million monthly users in the country from an application that has become a cultural powerhouse -- especially for young people -- and the nation's most viewed source of entertainment after Netflix.

"Let me state this unequivocally: ByteDance is not an agent of China or any other country," Chew will say, according to prepared remarks released ahead of the House committee hearing.

"TikTok has never shared, or received a request to share, US user data with the Chinese government. Nor would TikTok honor such a request if one were ever made," Chew will add in his opening statement on Thursday.

Despite his assurances, the cards in Washington seemed to be dealt against Chew, with several pieces of legislation, including one bill backed by the White House, already paving the way for a ban of the app.

"Americans deserve to know the extent to which their privacy is jeopardized and their data is manipulated by ByteDance-owned TikTok’s relationship with China," Cathy McMorris Rodgers, chair of the Energy and Commerce Committee, said.

"What's worse, we know Big Tech companies, like TikTok, use harmful algorithms to exploit children for profit and expose them to dangerous content online," added the Republican.

'STOP SUPPRESSING' 

In the final months of his term, former president Donald Trump also attempted to ban the app, but his effort was ultimately blocked by a US judge.

During that battle, a potential sale to Microsoft or spinoff to Oracle never got off the ground due to the opposition of China.

Beijing last week urged Washington to "stop unreasonably suppressing" TikTok and said the United States has no evidence that TikTok threatens US national security.

In a TikTok post earlier this week, Chew asked US users to defend their favorite app by sharing "what you love" about the platform with elected representatives.

On Wednesday, a group of around a dozen teenagers, teachers and business owners rallied at the US Capitol to express their opposition to a potential ban. 

"Are there other platforms out there? Absolutely -- I'm on them. But none of them have the reach that TikTok has," aspiring soapmaking entrepreneur @countrylather2020 told her 70,000 followers in a video recorded after she arrived in Washington.

A sale, even if all parties agreed, would be very complicated. 

The success of the platform is due to its powerful recommendation algorithm, and "separating the algorithm between TikTok and ByteDance is like a Siamese twins operation," analyst Dan Ives of Wedbush told AFP.

TikTok still hopes to appease the authorities.

Chew's testimony will promote the company's elaborate plan -- known as Project Texas -- to satisfy national security concerns in which the handling of US data will be ring-fenced into a US-run division.

He will tell the lawmakers that TikTok has already spent $1.5 billion on the project and hired 1,500 US-based staff to launch it.

Agence France-Presse

Congress takes aim at shrinking seats, legroom on airplanes

WASHINGTON — The Federal Aviation Administration would be required to set new minimum requirements for seats on airplanes under legislation to be considered in the House this week, possibly giving passengers a break from ever-shrinking legroom and cramped quarters.

The regulation of seat width and legroom is part of a five-year extension of federal aviation programs announced early Saturday by Republican and Democratic leaders of the House and Senate committees that oversee the nation’s air travel.

Congress faces a Sept. 30 deadline to keep FAA programs running. The Senate will also need to take up the bill this week or both chambers will need to pass a short-term extension.

The bill would prohibit the involuntary bumping of passengers who have already boarded a plane. But in a nod to the power of the commercial airliners, lawmakers declined to include language that would have prohibited airlines from imposing fees deemed “not reasonable and proportional.”


Democratic Sen. Bill Nelson of Florida said lawmakers from both chambers agreed it was time to take action on “ever-shrinking seats.”

“Relief could soon be on the way for weary airline passengers facing smaller and smaller seats,” Nelson said.

In July, the FAA rejected the idea of setting minimum standards for airlines seats and legroom as a safety measure. But Congress appears determined to require the FAA to do so.

The room between rows — measured from a point on one seat to the same point on the seat in the next row — has been shrinking for many years as airlines squeeze more seats onto their planes. It was once commonly 34 or 35 inches, and is now less than 30 inches on some planes.

Lawmakers also included several provisions to address concerns about increased airport noise levels caused by new flight paths. The bill would require the FAA to study the potential health impacts of flight noise and the feasibility of amending existing departure procedures.

The bill would also mandate that flight attendants get a minimum of 10 hours of rest between their work shifts and require airlines to communicate better with customers during mass flight cancellations and groundings.

Sen. John Thune, R-S.D., chairman of the Senate Commerce, Science and Transportation Committee, said he expects the House and Senate to move quickly to send the bill to the president’s desk. /ee

source: newsinfo.inquirer.net