Treasury Secretary Janet Yellen said during an interview on Sunday that the U.S. federal government would run out of money sometime in June if the debt ceiling increase is not passed as she suggested that Republican lawmakers were trying to do negotiations with a “gun to the head of the American people.”
Yellen made the remarks during an interview with ABC News host George Stephanopoulos on “This Week” while discussing the current need to raise the debt ceiling so the U.S. can pay its bills.
Yellen said that if the U.S. runs out of money, “financial and economic chaos would ensue.”
“U.S. Treasury securities are the safest bedrock security underlying the global financial system,” she said. “A failure of the United States to honor all of its debt would call into question our creditworthiness. Even as we get very close to this date, if Congress doesn’t act, we’re likely to see financial market consequences.”
Yellen said that if the U.S. is downgraded by the credit rating agencies that there would be “permanently higher borrowing costs for Americans for buying a home, buying a car, and a failure to raise the debt ceiling would cause a steep economic downturn.”
When Stephanopoulos noted that 43 Republican senators have come out and said they would not support raising the debt ceiling without significant spending cuts and other reforms, Yellen said that was like holding “a gun” to the heads of the American people.
“Well, look, I don’t want to get ahead of the negotiations that will occur,” Yellen said. “President Biden has invited — invited the leadership of Congress to the White House. So, on Tuesday, I know he wants to set up a process in which spending priorities and levels are discussed in the negotiation. But these negotiations should not take place with a gun really to the head of the American people because –”
“But they are taking place with that gun to the head of the American people,” Stephanopoulos claimed.
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“Well, it’s important for Congress to meet a responsibility,” Yellen responded. “Since 1960, the debt ceiling has been raised 78 times, three times during the prior administration, always with bipartisan support. And it simply is unacceptable for Congress to threaten economic calamity for American households in the global financial system as the cost of raising the debt ceiling and getting agreement on budget priorities.”
WATCH:
Sec. Yellen tells @GStephanopoulos that negotiations with GOP about debt “should not take place with a gun really to the head of the American people.”
“Since 1960, the debt ceiling has been raised 78 times, three times during the prior administration.” https://t.co/6CKoAXaTWF pic.twitter.com/2puQSxg4Np
— This Week (@ThisWeekABC) May 7, 2023