Treasury Secretary Janet Yellen said Sunday on ABC’s “This Week” that if Senate Minority Leader Mitch McConnell’s (R-KY) followed through on his threat that Republicans would not help to raise the debt ceiling in December, there could be a financial crisis.
Anchor George Stephanopoulos said, “We all dodged a bullet this week. Senator McConnell has warned President Biden that Republicans won’t help next time on the debt limit. I want to read part of his letter to President Biden. Quote, ‘I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement. Your lieutenants on Capitol Hill now at the time they claim they lack to address the debt ceiling through stand-alone reconciliation and all the tools to do it.’ What are the consequences if he keeps his word?”
Yellen said, “Well, it is absolutely imperative that we raise the debt ceiling. Debt’s necessary not to fund any new spending programs but to pay the bills that result from Congress’ past decisions. A group of business and community leaders met with President Biden and me last week to talk about the disastrous impact it would have for the first time America not paying its bills. Fifty million Americans who would receive Social Security payments would be put at risk. Our troops won’t know when or if they would be paid. The 30 million families that receive a child tax credit, those payments would be in jeopardy. And the nation’s credit rating would be in jeopardy as well. U.S. treasuries are the world’s safest possible asset that would be at risk as well. And that really underpins the reserve status, currency status of the dollar. So there is an enormous amount at stake. A failure to raise the debt ceiling would probably cause recession and could even result in a financial crisis. It would be a catastrophe.”
Follow Pam Key on Twitter @pamkeyNEN