Treasury Secretary Janet Yellen warned members of Congress on Friday that if the debt ceiling is not raised, it will risk “irreparable harm to the U.S. economy and the livelihoods of all Americans,” according to the Daily Caller.
In a letter to House Speaker Nancy Pelosi, Yellen expressed that she did not know how long the Treasury Department could keep the United States from defaulting on its obligations, which could result in catastrophic economic consequences. The debt ceiling will expire on August 1.
“In recent years Congress has addressed the debt limit through regular order, with broad bipartisan support,” Yellen writes. “I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible.”
The debt ceiling does not affect how much money the government spends. Instead, the debt ceiling limits how much debt the government can take while paying for provisions that have already been signed into law.
Yellen also sent her letter to House Minority Leader Kevin McCarthy, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, and the top Democrats and Republicans House Ways and Means and Senate Finance committees.
Earlier this week, Republicans threatened not to support a debt ceiling raise unless Democrats took a position towards a debt reduction provision.
Yellen stated the Treasury’s ability to prevent an economic fallout would only last till September, adding that failure to raise the debt ceiling could destroy America’s financial standing with other countries.
“This is why no President or Treasury Secretary of either party has ever countenanced even the suggestion of a default on any obligation of the United States,” Yellen concluded.
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