Congressional Democrats must be prepared to address the nation’s debt limit on their own if Republicans refuse to act in a bipartisan manner to avoid a national default as soon as next month, U.S. Treasury Secretary Janet Yellen said on Monday.
“There are a number of ways in which the debt ceiling can be raised,” she told reporters at a news conference in Dublin following meetings before she heads to Scotland for the UN climate change conference COP26.
“I strongly believe that it is bipartisan responsibility to do this. There is a way for Democrats to do it entirely on their own.”
Lawmakers in October temporarily raised the federal government’s borrowing limit to $28.9-trillion in legislation U.S. President Joe Biden signed into law, allowing the U.S. Treasury to continue to pay debts through early December.
Yellen has repeatedly urged Congress to act in a bipartisan manner to extend the U.S. government’s borrowing authority or else risk dangerous economic consequences that would trigger a recession and have ripple effects globally.
In multiple warnings to U.S. lawmakers, Yellen has noted Republicans and Democrats have historically come together to pay the nation’s incurred debts and avoid what she has said would be “catastrophic” effects.
Raising the debt ceiling allows the Treasury to finance previously incurred spending, including measures passed under former Republican President Donald Trump.
But Trump’s fellow Republicans in Congress have cited Democrats’ planned infrastructure and domestic spending bills under Biden – neither of which has passed yet – as reasons they will not vote to raise the U.S. debt ceiling.
Biden has called Republican’s stance “dangerous,” a notion echoed by some top business leaders.
Yellen said on Monday Democratic congressional leaders could use a processes called reconciliation to push through the debt ceiling bill on their own, adding that the Treasury would work closely with House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer “to try to come up with a way to do it by the Dec. 3 deadline” if needed.
Yellen made similar comments in an interview with the Washington Post published earlier on Monday.
In a separate interview with Reuters, Yellen said the United States could look at eventually lowering some tariffs on China in a reciprocal way.
She also discusses Biden’s expected Federal Reserve chair appointment and technology companies’ potential support of global tax rules.
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