Failing to raise U.S. debt ceiling would lead to ‘economic and financial catastrophe,’ Yellen says

The U.S. authorities dangers “financial and monetary disaster” if the Home fails to go a invoice to lift the $31.4 trillion debt ceiling, Treasury Secretary Janet Yellen mentioned on Monday.

The nation hit the statutory restrict final month, however Republican members of Congress are holding out on elevating it to barter modifications in federal spending guidelines with the White Home earlier than drafting a invoice. The Treasury Division below Yellen has taken a number of short-term measures to assist the federal government keep away from default.

“America has paid all of its payments on time since 1789, and never to take action would produce an financial and monetary disaster,” Yellen instructed ABC’s George Stephanopolous on Monday. “And each accountable member of Congress should agree to lift the debt ceiling.”

The Treasury Secretary mentioned the Home has all the time fulfilled its obligation to lift the restrict although it has typically “gone as much as the wire.”

Home Speaker Kevin McCarthy introduced that he’ll ship an handle on the debt ceiling at 5:30 p.m. ET on Monday. Talks between McCarthy and President Joe Biden have continued amicably, however an settlement has not been reached.

Through the interview, Yellen additionally praised the better-than-expected January job numbers and steadily reducing inflation — each are points she mentioned Biden will handle in his State of the Union on Tuesday.

“Final month, we created over 500,000 jobs, greater than 12 million because the President took workplace, and inflation is coming down,” she instructed Stephanopolous. “It stays too excessive, however it’s been falling for the final six months.”