Yellen warns of ‘economic chaos’ unless Congress addresses debt ceiling

U.S. Treasury Secretary Janet Yellen holds a news conference at the U.S. Department of Treasury in Washington, DC, on April 11, 2023.

Stefani Reynolds | AFP | beautiful pictures

Treasury Secretary Janet Yellen on Sunday said that failure to raise the debt ceiling would cause a “severe recession” in the US, and she reiterated her warning that the Treasury Department may run out of measures to pay its debt obligations by June.

“Our current prediction is at the beginning of JuneThe day will come when we won’t be able to pay our bills unless Congress raises the debt ceiling, and that’s what I strongly urge Congress to do,” Yellen told the program’s “This Week” program. ABC.

Yellen said the US had used “extraordinary measures” to avoid default and that was not something the Treasury Department could continue to do. She said Congress needed to act to avoid “economic disaster”.

“Everybody agrees that financial and economic chaos will follow,” Yellen said.

Lawmakers have been trying to find a way forward to raise or suspend the debt ceiling, which would allow the United States to pay its bills on time. But they are now at an impasse, increasing the risk of default.

Yellen called for swift and decisive action. IN letter before House Speaker Kevin McCarthy, R-Calif., Monday, Yellen said new tax receipts data forced the department to increase its estimate of when the Treasury Department “will not be able to continue to meet all of its obligations.” government” to potentially as early as June 1. This date is earlier than expected by Wall Street economists.

On Monday, President Joe Biden called the “big four” congressional leaders — Senate Majority Leader Chuck Schumer, DN.Y., Senate Minority Leader Mitch McConnell, R-Ky., McCarthy and House Democratic Leader Hakeem Jeffries, NY — to invite them to a May 9 meeting at the White House to discuss debt limits, a White House official told NBC.

Jeffries said Sunday that the meeting Biden held was “very important” and would help the United States find a way forward.

“We have to avoid default,” he told NBC’s “Meet the Press.”

But for Senator James Lankford, R-Okla., the meeting on the debt ceiling should have happened much sooner. He said the issue was raised the week after the November election and that President Biden’s refusal to negotiate was “astonishing”.

“Everybody knew this was coming and the president refused to negotiate on it,” he told ABC’s “This Week” on Sunday.


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