Yellen urges Congress to behave shortly on debt ceiling or threat ‘financial disaster’
US Treasury Secretary Janet Yellen on Sunday called on Congress to raise or suspend the country’s debt ceiling or risk “widespread economic disaster”.
In a column published by the Wall Street Journal, Yellen stated that the US has never been insolvent and said it must not be now.
““The US has always paid its bills on time, but the overwhelming consensus between economists and tax officials from both parties is that failure to raise the debt ceiling would cause widespread economic disaster.””
Senator Mitch McConnell, R-Ky., Has steadfastly refused to offer Republican support for raising the debt ceiling, leaving Democrats few options in a 50-50 Senate. Without acting, the Treasury Department is expected to be unable to pay the nation’s bills at some point in October.
On Friday, the White House warned of massive cuts to state and local governments if 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 agreed to suspend the debt ceiling three times.
The country’s accumulated debt is $ 28.4 trillion.
In her comment, Yellen warned that a default would “likely spark a historic financial crisis that would worsen the damage of the ongoing public health emergency,” which would result in social security payments being suspended, families’ monthly tax credits delayed, and possibly interest enforcement . Interest rate hikes that could drive stock prices down.
“There is no valid reason to ask for such a result,” Yellen wrote. “We are just coming out of the crisis. We must not plunge back into something that is completely avoidable. “