...

Boost US debt ceiling or risk possible recession, Yellen warns




  • In Business
  • 2021-10-10 16:54:00Z
  • By NY Daily News

Treasury Secretary Janet Yellen called on Congress to increase the federal government's debt limit by December, warning on Sunday that inaction could cause a recession.

The Senate's vote on Thursday extended the government's borrowing authority into December - when another showdown between Democrats and Republicans is likely.

If the debt ceiling isn't raised again, the consequences would include missed Social Security payments, failure to pay troops and a potential blow to the country's credit rating, Yellen said on ABC's "This Week."

"There is an enormous amount at stake. A failure to raise the debt ceiling would probably cause a recession and could even result in a financial crisis," she said.

She dismissed the suggestion of using the 14th Amendment - which states in part that the "validity of the public debt of the United States ... shall not be questioned" - to take on more debt.

"It's Congress' responsibility to show that they have the determination to pay the bills that the government amasses," Yellen said. "We shouldn't be in a position where we need to consider whether or not the 14th Amendment applies."

Senate Republicans have been trying to force Democrats to raise the debt ceiling on their own.

Last week, Senate Minority Leader Mitch McConnell, R-Ky., agreed to let the Democrats take a vote on a short-term extension but said they would have to use an arcane procedure called reconciliation for a longer-term extension come December.

At issue is a cap on how much money the federal government is allowed to borrow.

Congress used to pass regular increases with little drama, but in recent years fiscal conservatives have pounced on the opportunity to voice concerns about government spending.

Meanwhile, Senate Democrats are working to pass a global corporate tax rate that 130 countries agreed upon last week.

The deal, which has come under criticism by Republicans, would apply a 15% tax to big international businesses.

Democrats are expected to try to pass the tax through a process of budget reconciliation.

"I am confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package," Yellen said.

"It's something that is very important for American workers to stop what's been a decadeslong race to the bottom on corporate taxation."

---

COMMENTS

More Related News

US budget deficit hits $2.77 trillion in 2021, 2nd highest
US budget deficit hits $2.77 trillion in 2021, 2nd highest

The U.S. budget deficit totaled $2.77 trillion for 2021, the second highest on record but an improvement from the all-time high of $3.13 trillion reached in ...

The new offshore wind seascape
The new offshore wind seascape

Global offshore wind heavyweight Ørsted already sees a regulatory sea-change under President Biden, but also says Congress has an important role to play.Why ...

Biden gives strongest signal he
Biden gives strongest signal he's ready to move to end Senate filibuster

After voting rights defeat, president expresses mounting frustration over rule that allows 41 senators to block legislation Joe Biden at the CNN town hall in...

Biden wants to
Biden wants to 'fundamentally alter' Senate filibuster on some issues
  • US
  • 2021-10-22 02:26:56Z

President Joe Biden on Thursday said the United States should "fundamentally alter" the Senate filibuster on "certain issues" as his administration faces...

Biden says he
Biden says he's open to eliminating filibuster to pass voting-rights 'and maybe more' issues

President Joe Biden said at a CNN town hall on Thursday that he's open to eliminating the filibuster for voting rights legislation "and maybe more."

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business