Janet Yellen made another call on Congress to act on the debt limit.
WASHINGTON – Treasury Secretary Janet L. Yellen on Monday reiterated her call for Congress to raise or suspend the country’s borrowing limit, urging lawmakers to act on a bipartisan basis and warning that a default would cause “irreparable damage” to the economy.
In a letter to Congress, Yellen reminded lawmakers that raising the debt ceiling does not authorize or increase government spending. In fact, she said, it allows the Treasury Department to pay for expenses that have already been passed.
“Failure to meet these obligations would cause irreparable damage to the US economy and the livelihoods of all Americans,” said Ms. Yellen.
Leading Republicans, including Minority Leader Senator Mitch McConnell, have suggested Democrats themselves should lift the debt ceiling using a budget procedure known as reconciliation.
Republicans and Democrats in the Senate are moving forward this week on the final stages of a bipartisan infrastructure bill. Meanwhile, Democrats in the Senate are also pushing ahead with a $ 3.5 trillion budget measure that would allow them to decree huge federal investments to expand social and environmental programs.
Ms Yellen’s letter to Congress was her third such warning in recent weeks. Last week, she told lawmakers she was already starting to use extraordinary measures, such as limiting investments in government retirement programs, to delay a default.
Due to the various relief programs in place, it is more difficult for the Treasury Department to predict how long Ms. Yellen will be able to use such tools. The Congressional Budget Office said last month that the Treasury Department would likely run out of cash in October or November.
Ms. Yellen, in her letter, noted that during the Trump administration, Congress raised the debt ceiling on a bipartisan basis three times.
“Congress should do it again now by raising or suspending the debt limit on a bipartisan basis,” Ms. Yellen said. “The vast majority of the debt subject to the debt ceiling was constituted before the administration took office.
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