Yellen urges Congress to act quickly on debt ceiling or risk “economic catastrophe”
US Treasury Secretary Janet Yellen on Sunday urged Congress to raise or suspend the country’s debt ceiling or risk “widespread economic catastrophe.”
In an opinion piece published by the Wall Street Journal, Yellen noted that the United States had never defaulted and said it should not now.
““The United States has always paid its bills on time, but the overwhelming consensus among economists and treasury officials on both sides is that failure to raise the debt ceiling would produce widespread economic catastrophe. ““
Senator Mitch McConnell, R-Ky., Has steadfastly refused to provide Republican support for increasing the debt ceiling, leaving Democrats with few options in a 50-50 split Senate. Without taking action, the Treasury is expected to be unable to pay the country’s bills in October.
The White House on Friday warned of deep cuts to state and local governments in the event the federal government defaults.
Congress has raised or suspended the debt ceiling about 80 times since 1960, Yellen said, and during the Trump administration, Democrats three times agreed to suspend the debt ceiling.
The country’s accumulated debt is approximately $ 28.4 trillion.
In its editorial, Yellen warned that a default would “likely precipitate a historic financial crisis that worsens damage from the lingering public health emergency”, leading to the suspension of Social Security payments, delays in tax credits monthly families and potentially forced interest. rate hikes that could send stocks plunging.
“There is no valid reason to invite such a result,” Yellen wrote. “We are just emerging from the crisis. We must not fall back into an entirely preventable situation.