Yellen reiterates that a default could undermine US leadership

Yellen reiterates that a default could undermine US leadership


Treasury Secretary Janet Yellen reiterated her warning in a letter to on Monday Speaker of the House Kevin McCarthy on the grounds that Congress should fail raise the debt ceilingit would cause great trouble for American families.

Yellen said that leaving the debt crisis unsolved would “damage our global leadership and raise questions about our defense capabilities.” our national security interests.”

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She also reiterated that the Treasury Department will not be able to meet all of the government’s commitments unless Congress can find a solution by early June and “possibly as early as June 1.”

Yellen’s letter comes just a day before the crucial meeting between them President Joe Biden and McCarthy, where both leaders are widely expected to find a solution. “I remain optimistic because I’m an innate optimist,” Biden previously said, adding that he believes both are a wish sides to reach an agreement. “I think we’ll make it.”

Yellen also cited the story to illustrate how a stalemate on the debt ceiling could hurt the economy. “We have learned from past debt limit impasses that waiting until the last minute to suspend or raise the debt limit seriously damages business and consumer confidence, increases short-term borrowing costs for taxpayers, and negatively impacts the creditworthiness of the United States.” can.” States,” she said in the letter. Yellen also noted that Treasury borrowing costs for securities maturing in early June have increased significantly.

bottlenecks: In the meantime, new tree stumps are said to have developed after the White House presented Republican leaders in Congress on Monday with a list of proposals to reduce the deficit by closing tax loopholes is generally rejected by the GOP.

The President is expected to leave for a meeting in Japan on Wednesday G7 Leader. Biden said he still intends to make the trip.

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