Treasury Secretary Janet Yellen contacted multiple prominent American business leaders on Monday to detail the financial risk stemming from the current debt ceiling controversy.
The debt ceiling, a policy established by Congress that prevents the federal government from spending beyond a predetermined national debt limit of $31.4 trillion, surpassed the threshold earlier this year. Yellen warned last week that the nation could face a default as soon as the first day of June unless the debt limit is suspended or increased.
The veteran economist held multiple one-on-one conversations with individual executives about the “dangerous consequences of the current brinkmanship” in recent days, one of two unnamed sources familiar with the matter said in a report from Reuters. The sources declined to name the executives with whom Yellen discussed the phenomenon.
Biden administration officials have repeatedly asserted that Republican lawmakers are risking a worldwide recession by insisting that any amendment to the debt ceiling should be accompanied by meaningful spending cuts or limits upon future expenditures. Yellen said in an interview on Sunday that Republicans are thereby holding a “gun to the head of the American people,” contending that the effort to achieve “agreement on budget priorities” before increasing the debt limit “simply is unacceptable” due to the recession risks.
House Speaker Kevin McCarthy (R-CA) and President Joe Biden met in early February to discuss possible mechanisms to raise or eliminate the debt limit while reconsidering budget priorities, but the commander-in-chief delayed further meetings for several months. The two officials are scheduled to meet for the second time alongside other lawmakers on Tuesday.
White House Press Secretary Karine Jean-Pierre said in a Monday briefing that Biden would attempt to create separate negotiations processes for budget cuts and the debt ceiling. “Remember, that’s regular order,” she told reporters. “That is the way that we’re supposed to be doing this: having a negotiation on budget, not connecting it to the debt ceiling.”
Members of the House Freedom Caucus, a bloc of conservative Republicans, have said they would consider voting to raise the debt ceiling in exchange for a framework that returns expenditures to fiscal year 2022 levels, raises the debt ceiling only for the next year, and limits annual spending growth to 1% over the next decade. McCarthy unveiled a budget proposal that mirrored the framework and passed the measure through the House two weeks ago. The narrowly Republican majority requires votes from the House Freedom Caucus to pass bills.
Jean-Pierre said last week that “the only practical path to avoid default is for Congress to suspend the debt limit without conditions” because of the “limited time” before the potential default. House Freedom Caucus Chairman Scott Perry (R-PA) previously told The Daily Wire that the remarks were “like a pyromaniac starting a fire and watching it burn for months suddenly declaring it needs to be put out while simultaneously pouring more gas on it.”
CLICK HERE TO GET THE DAILY WIRE APP
Forty-three Republican members of the Senate recently endorsed a letter declaring that they would oppose a “clean” debt ceiling bill separate from any spending cuts or other policy concessions. Meanwhile, Senate Majority Leader Chuck Schumer (D-NY) announced that the upper chamber would hold hearings on the bill to “expose the true impact of this reckless legislation on everyday Americans.”