Janet Yellen has a warning for Congress: raise the debt ceiling or the government will run out of cash soon.
The Treasury Secretary Wednesday told lawmakers that Uncle Sam’s coffers will likely run dry by the end of October, forcing a government shutdown that could be particularly devastating as the economy struggles to recover from the COVID pandemic. “A delay … would likely cause irreparable damage to the U.S. economy and global financial markets,” Yellen wrote.
“At a time when (Americans) are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk,” Yellen added. The stark warning comes amid negotiations for a $4.5 trillion dollar infrastructure deal.
At a press conference, Pelosi provided few details of how Democrats planned to get an increase approved, but said “it has to happen.” Raising the debt limit does not increase spending, but simply allows Treasury to finance projects already approved by Congress. Without an increase, the United States could face an unprecedented default on payments. A 2011 standoff on raising the debt ceiling caused S&P Global Ratings to downgrade US sovereign debt from its coveted AAA rating.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: WASHINGTON POST
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