Janet Yellen, Treasury Secretary, stated on Saturday that House Republicans are trying to negotiate spending cuts in the renewed battle for the debt ceiling. “very irresponsible.”
An official informed Kevin McCarthy (R. CA), House Speaker, and other legislators in a recent correspondence that the debt ceiling was an arbitrary limit on the nation’s debt set by Congress. It exceeded the statutory limit at nearly $31.4 trillion as this week. In an interview with The Associated Press, Yellen stated that House Republicans who call for spending cuts run the risk of a “self-imposed calamity in the United States and the world economy.”
“This is about paying bills that have already been incurred by decisions with this and past Congresses and it’s not about new spending,”Commenting on the inability to make sustainable spendings, she stated that this was not possible. “negotiated over whether or not we’re going to pay our bills.”
Yellen, who is currently touring multiple African countries for a trip centered on the continent’s economic development, said that the position of withholding a debt ceiling hike until more spending cuts occur is “a very irresponsible thing to do”This could result in serious consequences, even if the person is not already there. “the day of reckoning.”In a letter addressed to legislators, she stated that investments in the Civil Service Retirement and Disability Fund and Postal Service Retiree Health Benefits Fund had been temporarily suspended. “extraordinary measures”Treasury Department in order to preserve the government’s liquidity are set to be implemented until June.
Yellen predicts, however that Congress will manage the situation as they are aware of the economic calamity caused by federal government defaults on its obligations. Beyond the possibility of a default, diminished trust in the government’s ability to repay debt can also cause “markets to become quite concerned,”Elle continued.
To continue its deficit-driven spending, the federal government relies on large budget deficits for many decades. Social Security, Medicare and other initiatives related to health accounted for 46% in the federal budget last year according to data provided by the Treasury Department. However, national debt maintenance costs have soared due to rising interest rates.
Yellen, the former director of Federal Reserve, stated in another notice that last week “failure to meet the government’s obligations”This would refer to “irreparable harm”both the domestic and global economies. “Presidents and Treasury Secretaries of both parties have made clear that the government must not default on any obligation of the United States,”Sie wrote. “Yet the use of extraordinary measures enables the government to meet its obligations for only a limited amount of time.”
McCarthy is scheduled to meet with President Joe Biden in order to negotiate the debt ceiling. House Republicans have asked their Democratic counterparts about possible spending cuts. Jason Smith (R,MO) is the chairman of Ways and Means Committee. He stated that he believes there are ways to cut spending. “reckless spending”Produced “the worst spike in prices in forty years”This can lead to a decrease in standard of living.
“Instead of attacking his political opponents, President Biden should be spending this time working with House Republicans to address the debt ceiling in a way that imposes some fiscal sanity. Otherwise, the President is simply scheduling America’s next debt crisis,”He went on. “We can find commonsense solutions to halt reckless spending, put American’s finances on stable footing, and ensure we meet our debt obligations.”
The full article is available here here