Treasury Secretary Janet Yellen urges Republicans and Democrats to come together to raise the debt limit and avoid ‘irreparable harm’ to the U.S. economy and a government shutdown
- Democrats did not include raising the debt ceiling in their budget document
- Sets up massive fight with GOP lawmakers this fall over raising borrowing limit
- Treasury Secretary Janet Yellin reminded lawmakers failure to raise the debt limit ‘would cause irreparable harm to the U.S. economy’
- The United States is projected to exhaust its borrowing authority in October
Democrats did not include raising the debt ceiling in their budget document released Monday, paving the way for a massive fight this fall with Republicans over raising the nation’s borrowing limit.
Treasury Secretary Janet Yellin signaled the move in a statement before the budget document was released when she urged both Democrats and Republicans to support the raise in order to avoid a default on the nation’s debt.
‘The vast majority of the debt subject to the debt limit was accrued prior to the administration taking office,’ Yellen said. ‘This is a shared responsibility, and I urge Congress to come together on a bipartisan basis as it has in the past to protect the full faith and credit of the United States.’
Treasury Secretary Janet Yellin reminded lawmakers failure to raise the debt limit ‘would cause irreparable harm to the U.S. economy’
By not including it in the budget reconciliation legislation, Senate Democratic Leader Chuck Schumer will need 10 Republican senators to agree to passage, something the GOP lawmakers have said they will not do.
The Democrats’ move is a major risk. If the United States defaults on its debt it could trigger a global economic crisis. The nation is projected to hit its debt ceiling in October.
Senate Republican Leader Mitch McConnell warned not a single Republican will support raising the debt limit, citing the trillions spent by the government during the coronavirus pandemic.
He told Punchbowl News last month that he ‘can’t imagine there will be a single Republican voting to raise the debt ceiling’ in light of how much Congress has already spent during the pandemic.
And he doubled down on his threat on Monday.
‘Democrats want Republicans to help them raise the debt limit so they can keep spending historic sums of money with zero Republican input and zero Republican votes,’ he said on the Senate floor.
‘If they don’t want Republicans’ input, they don’t need our help,’ he added. ‘It couldn’t be simpler. It couldn’t be more fair.’
Yellin reminded lawmakers that failure to raise the debt limit ‘would cause irreparable harm to the U.S. economy and the livelihoods of all Americans.
Senate Majority Leader Chuck Schumer (left) did not include raising the debt ceiling in the budget resolution, meaning he’ll need 10 GOP lawmakers to support and Senate Republican Leader Mitch McConnell (right) said none of his senators will support it
The United States is projected to exhaust its borrowing authority in October.
Failure to approve an increase in the debt limit, at about $28.5 trillion and rising, could lead to another federal government shutdown or a debt default.
The U.S. government has never defaulted on its debt and isn’t expected to do so this fall.
Congress voted in July 2019 to suspend the debt limit until July 31, 2021.
The Treasury is using temporary ’emergency measures’ to conserve cash so the government can keep paying its obligations to bondholders, veterans and Social Security recipients.