Janet Yellen warns of a ‘catastrophe’ if the debt ceiling is not raised.
Treasury Secretary Janet Yellen of the United States has cautioned that failure to raise the country’s debt ceiling might have serious implications.
Without an agreement to extend the federal government’s borrowing capacity, it may run out of money by early June.
The federal government may be unable to make wage, assistance, and other payments at that point.
“It is the responsibility of Congress to do this.” If they do not, we will face an economic and financial disaster that we will have caused,” she said.
Ms. Yellen told ABC News on Sunday that debt ceiling talks should not take place “with a gun to the head of the American people.”
However, time is running out to reach an accord.
President Biden will meet with Republican leaders on Tuesday to ask them to agree to raise the existing $31.4 trillion (£25.12 trillion) cap.
Typically, Congress attaches approval of a higher debt ceiling to budget and expenditure constraints.
The House of Representatives enacted a bill last month to extend the debt ceiling, which is currently roughly equal to 120% of the country’s yearly economic output, but it also included substantial expenditure cuts over the next decade.