WASHINGTON – US Treasury Secretary Janet Yellen on Sunday said debt ceiling negotiations should not take place “with a gun to the head of the American people”.
Dr Yellen, in an interview on ABC News, reiterated a warning to lawmakers the government could pay its bills only through early June without increasing the limit, which the government hit in January.
She said there are “simply no good options” for solving the debt limit stalemate in Washington other than Congress lifting the cap and cautioned that resorting to the 14th Amendment would provoke a constitutional crisis.
“We should not get to the point where we need to consider whether the president can go on issuing debt” without Congress lifting the debt ceiling, Dr Yellen said.
“This would be a constitutional crisis,” she said.
Constitutional scholars and economists have been split on the idea that the administration continue issuing debt by citing a provision of the US Constitution that says the validity of public debts “shall not be questioned”.
Dr Yellen deflected several questions on whether President Joe Biden might use that option, returning time and again to her insistence that Congress lift the ceiling.
“All I want to say is that it’s Congress’s job to do this,” she said. “If they fail to do it, we will have an economic and financial catastrophe that will be of our own making, and there is no action that President Biden and US Treasury can take to prevent that catastrophe.”
Deputy Treasury Secretary Wally Adeyemo also sounded the alarm on Sunday about the risks of a default during an interview on MSNBC’s The Sunday Show.
“Default is catastrophic for the United States,” Mr Adeyemo said. “If we were to default on our debt, it would have a terrible impact on interest rates.”
Mr Biden will meet Republican House Speaker Kevin McCarthy, Republican Senate Minority Leader Mitch McConnell and top Democrats at the White House on May 9, kicking off a frantic few weeks of negotiation before the US runs out of money to pay its bills as soon as June 1. REUTERS
