As the October 18 deadline approaches and lawmakers are still fighting over raising the debt ceiling, US Treasury Secretary Janet Yellen warned Tuesday that the unprecedented US debt default could trigger another recession, The Hill reports.
Yellen reiterated her concerns about the catastrophic economic crisis the US might face as Republicans continue to block measures to suspend the debt ceiling with less than two week until a default, stressing it would be devastating if the US falls into a position where it lack the resources to pay the government’s bills.
That, according to the Treasury Secretary, would really undermine confidence in the administration’s willingness to stand behind its debts and in the full faith and credit of the US,
After the two-year suspension signed by former President Trump expired without any action from Congress, the debt ceiling was reimposed on Aug. 1 though Yellen has pleaded with lawmakers to raise or suspend the federal debt limit to allow the Treasury to begin issuing new bonds and generate more cash.
Yellen has previously warned that the United States will not have the funds to meet its obligations to creditors after October 18 if the Congress does not relax the legal debt ceiling.
Reflecting the extraordinary acrimony in Washington, Republicans are refusing to vote for raising the federal debt limit and even vowed to block Democrats from passing a simple vote by themselves along party lines although the Congress has done this dozens of times over the decades and the votes were usually bipartisan and drama-free.
Senate Republicans are attempting this year to force Democrats to use reconciliation to take sole responsibility for the debt hike in order to make keeping the country solvent as difficult as possible for them, but Democrats are refusing this so far accusing the GOP of taking the nation’s financial standing hostage.