In an attempt to get Congress to raise the debt ceiling without conditions, Treasury Secretary Janet Yellen issued a warning about the "economic and financial catastrophe" the country could face if it defaults on its payments.
Yellen said the debt ceiling impasse "could threaten all the progress" she said has been made in recent years. This, while acknowledging that inflation remains a major problem for the nation.
"Our administration’s top economic priority is to tackle inflation while protecting the economic gains of the past two years," she said, adding that for her the best option would be to raise or eliminate the debt limit, which in January reached $31.4 trillion.
"This economic catastrophe is preventable. Congress must vote to raise or suspend the debt limit. It should do so without conditions. And it should not wait until the last minute," she said.
Yellen Warns of ‘Economic and Financial Catastrophe,’ but Insists It’s ‘Preventable’ https://t.co/hPxC12loTm
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Republicans have been willing to negotiate and even recently put forward a proposal to increase the cap by $1.5 billion, which included a spending cut of $4.5 billion over the next decade. However, President Joe Biden rejected this proposal.
The GOP option suggested taking back unspent coronavirus relief funds, canceling Biden's student loan forgiveness program, eliminating costly green energy incentives, boosting domestic oil and gas production, as well as reimposing work requirements for welfare recipients as well as reducing domestic and military spending to last year's levels.
"If Washington wants to spend more, it will have to come together to find savings elsewhere – just like every household in America does," said House Speaker Kevin McCarthy.
Republicans have insisted on the importance of reaching an agreement as soon as possible to prevent the United States from falling into its first-ever default.