Global Courant 2023-05-21 21:40:07
US Treasury Secretary Janet Yellen speaks at the Independent Community Bankers Of America (ICBA) Capital Summit in Washington, DC, US, on Tuesday, May 16, 2023.
Nathan Howard | Bloomberg | Getty Images
Treasury Secretary Janet Yellen said on Sunday that “hard choices” would have to be made about which bills would go unpaid if the debt ceiling was not raised.
Yellen reaffirmed her warning that the United States could default as early as June 1, which she says could lead to widespread “economic chaos”. There will be no good results if Congress doesn’t take action, she said.
“We’re focused on raising the debt ceiling, and there will be tough choices if that doesn’t happen,” she told NBC’s “Meet the Press.” “There can be no acceptable outcomes if the debt ceiling is not raised, no matter what decisions we make.”
Lifting the debt ceiling is necessary for the government to cover spending commitments already approved by Congress and the president to avoid default. Raising the debt ceiling won’t allow new spending, but House Republicans have said they won’t lift the cap if Biden and lawmakers fail to agree on future cuts.
As a result, the on-again, off-again deliberations on Capitol Hill were tense.
President Joe Biden said on Sunday that Republicans should “get off their extreme position” at a news conference ahead of his departure from Japan’s Group of Seven Summit. After negotiations stalled late Saturday, Biden said he planned to call House Speaker Kevin McCarthy, R-Calif., on his way back to Washington.
“It’s time the Republicans accept that there is no bipartisan deal that can be made alone, solely on their partisan terms,” Biden said.
McCarthy told reporters on Sunday after arriving at the Capitol that he planned to speak to Biden “in the next hour,” adding that he is happy the president is returning to the US.
“I think he needs to get away from the socialist wing of the Democratic party and represent America. And that means both sides have to compromise,” McCarthy said. “I’ve been there all along.”
At the Independent Community Bankers of America Capital Summit Tuesday, Yellen said the White House Council of Economic Advisers has determined that bankruptcy could lead to an economic downturn as bad as the Great Recession, with 8 million Americans losing their jobs and the value of the stock market falls. by about 45%.
She also noted a Moody’s Analytics report that found similar numbers with more than 7 million Americans out of work and $10 trillion in family wealth evaporating. Yellen also warned that breaching the debt ceiling could affect essential government services.
Biden said on Sunday that he thinks an agreement can be reached with the Republicans, but is not certain.
“I can’t guarantee they won’t force bankruptcy by doing something outrageous,” he said.
