U.S. Treasury chief Janet Yellen warned Sunday that it was “absolutely imperative” that Congress increase the country’s borrowing authority even as the immediate threat of a first-ever default on paying the government’s bills has been alleviated through early December.
“It would be a catastrophe” if the United States does not increase the ceiling on its current national debt of nearly $29 trillion, Yellen told ABC’s “This Week” show.
Yellen had said that the U.S. would run out of money to pay its bills on October 18, but Senate Republican and Democratic leaders agreed last week on an emergency $480 billion increase in the debt ceiling to pay the government’s bills through December 3, at which time the contentious political debate in Washington over an extension of the government’s borrowing authority could play out again.
Senate Republican leader Mitch McConnell and 10 other Republicans voted to clear the path for Democratic senators to increase the government’s borrowing authority on a 50-48 party-line vote last week, with the House of Representatives expected this week to assent to the temporary increase.
McConnell also said he would not cooperate with opposition Democrats in a further debt ceiling increase in December. He called on Democrats to raise it on their own through a legislative procedure known as reconciliation, in which Democrats could vote for a debt ceiling increase without the threat of Republicans blocking it with a filibuster.
Democrats so far have been reluctant to use the reconciliation process because they say it is cumbersome and time-consuming. They also say Republicans should join them in raising the debt ceiling because the country’s long-term debt has occurred under both Republican and Democratic control of the White House and Congress.
The U.S., virtually alone among the world’s countries, imposes a lid on its government spending. Yellen, however, said the figure has been increased about 70 times since 1965, either to a specific amount or suspended altogether for a year or two, since the U.S. government chronically spends more than it collects in taxes.
She has called for doing away with the debt ceiling, but that is unlikely since both Republican and Democratic lawmakers, thinking it is a winning political tactic in the U.S., repeatedly blame each other for what they contend is wasteful and unneeded spending by their opponents.
“It should be a shared responsibility (to increase the debt ceiling), not any one party,” Yellen said. “It is Congress’ responsibility.”
“We have to reassure the world that the United States is fiscally responsible,” she said, adding that if the borrowing authority is not increased before December 3, it would amount to “a self-inflicted crisis.”
She said that if the debt ceiling is not increased, 50 million older Americans might not receive government pension benefits and that “our troops won’t know when or if they would be paid. The 30 million families that receive a child tax credit, those payments would be in jeopardy.”