Treasury chief says no increase in debt ceiling is “disaster”

Treasury Secretary Janet Yellen on Sunday warned it would be a “disaster” if Democrats and Republicans did not raise the debt ceiling, and painted a dire picture of the consequences such a scenario would have on Americans and the US economy.

The Senate voted in party favor last week to increase the federal government’s borrowing limit by about $ 480 billion, but with another showdown expected in December. Senate Minority Leader Mitch McConnell, who approved the short-term extension, said Democrats would be on their own.

Yellen was asked what would happen if the debt limit was not increased.

“Fifty million Americans would not receive Social Security benefits. Our troops will not know when or if they will be paid. The 30 million families who receive a child tax credit, these payments would be threatened, ”she told ABC“ This Week ”, adding that the situation“ could lead to a catastrophe ”.

No Republican voted last Thursday to raise the debt ceiling, but 11 GOP senators voted with Democrats to end debate and allow the measure to be voted on.

McConnell (R-Ky.) Joined his GOP colleagues to vote for closure.

But upset by the fiery speech by Senate Majority Leader Chuck Schumer, denouncing Republicans for playing a “dangerous and risky partisan game” during negotiations, McConnell said his caucus would not be there to help in December. , which means Democrats would need 60 votes in the 50-50 split chamber.

Although the Senate has passed the law, it still needs to be approved by the House before it is signed by President Biden.

Despite the dire consequences of the failure to raise the debt ceiling in December, Yellen opposed invoking the “public debt clause” of the 14th Amendment.

George Stephanopoulos of ABC has asked Yellen to justify the continuation of borrowing under the 14th Amendment which states that “the validity of the United States’ public debt should not be called into question. “

“We shouldn’t be in a position where we have to consider whether the 14th Amendment applies or not. It’s a dire situation the country shouldn’t be in, ”Yellen said.

The Treasury Secretary has said she does not want the President to be placed in a scenario in which Congress refuses to “let us pay the government bills.”

“You know, what should you pay first?” … We need to reassure the world that the United States is fiscally responsible and can count on us to pay our bills. And it’s the job of Congress to do it on a bipartisan basis, ”she said.

She called on Schumer and House Speaker Nancy Pelosi to “deal with this so that we don’t face this situation.”