During a meeting with the Independent Community Bankers of America, Janet Yellen, the Secretary of the US Treasury Department, expressed her concern about the dwindling time Congress has to raise the debt ceiling. She emphasized that failing to do so would result in the United States defaulting on its debt, which would have disastrous effects on the nation’s economy. Yellen further highlighted that such a situation would have unprecedented consequences, affecting numerous countries globally.
Yellen emphasized that with each passing day of inaction by the House, the nation faces growing economic burdens. She underscored the sensitivity of these costs, as they have the potential to impede the country’s economic progress.
The response to her comments on social media was varied. Some users agreed with her assessment, while others noted that she may have a biased perspective since the Biden administration shares responsibility for the current situation by not reaching a consensus with Congress.
Yellen recently made a prediction that the United States could officially default on its debt by June 1. This announcement was seen by many experts as a positive development, as it provided sufficient time for President Joe Biden and the four congressional leaders to come to an agreement. However, such an agreement has not been reached thus far.
During the meeting with the Independent Community Bankers of America, Yellen stressed the urgency for Congress to take immediate action. She highlighted that a default, according to the consensus among most economists in the country, would have severe financial and economic consequences amounting to a “catastrophe.” Yellen argued that it would undo the progress made in the country’s economy and result in a financial “storm.”
Additionally, she expressed concerns about the disruption of services such as law enforcement, national defense, and border security, as they heavily rely on contractors and federal employees.
Kevin McCarthy, the House Speaker and a Republican representative from California, emphasized the need for a deal to be reached by the upcoming weekend to allow sufficient time for Congress to pass it.
