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


US Treasury Secretary Janet Yellen holds a press conference at the US Treasury Department on April 11, 2023 in Washington, DC.

Stephanie Reynolds | AFP | Getty Images

Treasury Secretary Janet Yellen said on Sunday that failing to raise the debt ceiling would result in a “severe economic recession” in the US and reiterated his warning That the Treasury Department may have run out of ways to pay off its debt obligations by June.

“Our current projection is that in early JuneThere will come a day when we will be unable to pay our bills unless Congress raises the debt ceiling, and that is something I strongly urge Congress to do,” Yellen said on ABC’s “This Week.” told.

Yellen said the US is already using “extraordinary measures” to avoid default, and that is not something the Treasury Department can continue to do. He said Congress needed to act to avoid an “economic disaster”.

“It is widely agreed that there will be financial and economic chaos,” Yellen said.

Lawmakers are trying to find a way forward to raise or suspend the debt ceiling so America can pay its bills on time. But they are currently at an impasse, raising the chances of default.

Yellen has called for swift and decisive action. In a letter House Speaker Kevin McCarthy, R-Calif., on Monday, Yellen said new data on tax receipts forced the department to advance its estimate of when the Treasury Department “will likely be unable to meet all of the government’s obligations.” to early June 1st. This date is earlier than expected by Wall Street economists.

On Monday, President Joe Biden invited the “Big Four” congressional leaders — Senate Majority Leader Chuck Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., McCarthy and House Democratic Leader Hakeem Jefferies, N.Y. — to attend the meeting. called for. of a May 9 meeting at the White House to discuss the debt ceiling, a White House official told NBC.

Jeffries said Sunday that the meeting Biden has organized is “very important” and will help America find a way forward.

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

But Sen. James Lankford, R-Okla. For, the meeting about the debt ceiling should have happened much earlier. He said the issue was raised a week after the election in November, and that President Biden’s refusal to negotiate has been “stunning”.

“Everybody knew it was coming and the president refused to be able to have a conversation about it,” he told ABC’s “This Week” on Sunday.

Source link