Treasury Secretary Janet Yellen said there are “no good options” for avoiding the dire consequences if Congress fails to raise or suspend the nation’s debt ceiling in the next few weeks.
Yellen told ABC’s This Week that the government would be unable to pay obligations, including interest payments on debt and funds owed to Social Security recipients and Medicare providers. “And it’s widely agreed that financial and economic chaos would ensue,” she said.
The remarks come two days before a high-stakes White House meeting between President Joe Biden and the leadership of both parties in Congress and the Senate.
The U.S. hit the $31.4 trillion debt ceiling in January, and has been maneuvering to continue to pay the obligations, but could run out of options to do that by June 1, Yellen warned last week.
Democrats want to raise the debt limit in a clean bill, while Republicans are pushing for spending cuts to be attached. Biden invited the lawmakers, including House Speaker Kevin McCarthy (R., Calif.), to Tuesday’s meeting but has urged Congress to raise the debt ceiling without conditions.
“The sooner these two guys get in the room and listen to what the other one needs, the more likely they are to solve this challenge and protect the full faith and credit of the United States,” said Sen. Kyrsten Sinema (I., Ariz.), on
CBS
‘ Face the Nation on Sunday.
There is some talk about a short-term solution that could buy time, but ultimately it would just push the fight closer to the 2024 general election.
House Republicans have already passed a bill to raise the debt ceiling into next spring with lower spending targets and the elimination of some Biden legislative victories. The bill isn’t expected to survive in the Senate, where Democrats hold a slim majority.
Asked about a possible short-term extension, Rep. Hakeem Jeffries (D., N.Y.), the House Minority Leader, told NBC’s Meet the Press on Sunday he didn’t see that as a responsible alternative.
But Jeffries didn’t rule it out, either. “I don’t think the responsible thing is to kick the can down the road,” he said. But when pressed if he was ruling out a short-term solution, Jeffries said “We have to avoid default. Period. Full stop.”
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