Janet Yellen made another call on Congress to act on the debt limit.

WASHINGTON — Treasury Secretary Janet L. Yellen reiterated her call for Congress to raise or suspend the nation’s borrowing cap on Monday, urging lawmakers to act on a bipartisan basis and warning that a default would cause “irreparable harm” to the economy.

In a letter to Congress, Ms. Yellen reminded lawmakers that raising the debt limit does not authorize or increase government spending. In fact, she said, it allows the Treasury Department to pay for expenditures that have already been enacted.

“Failure to meet those obligations would cause irreparable harm to the U.S. economy and the livelihoods of all Americans,” Ms. Yellen said.

Top Republicans, including Senator Mitch McConnell, the minority leader, have suggested that Democrats will have to lift the debt ceiling on their own using a budgetary procedure known as reconciliation.

Republicans and Democrats in the Senate are pressing ahead this week on the final stages of a bipartisan infrastructure bill. Separately, Democrats in the Senate are also moving forward with a $3.5 trillion budget measure that would allow them to enact huge federal investments to expand social and environmental programs.

Ms. Yellen’s letter to Congress was her third such warning in recent weeks. Last week, she told lawmakers that she was already beginning to employ extraordinary measures, such as curbing investments in government retirement programs, to delay a default.

Because of the various relief programs that are in place, it is more difficult for the Treasury Department to predict how long Ms. Yellen can use such tools. The Congressional Budget Office said last month that Treasury Department would likely run out of cash sometime in October or November.

Ms. Yellen, in her letter, noted that during the Trump administration, Congress lifted the debt ceiling on a bipartisan basis three times.

“Congress should do so again now by increasing or suspending the debt limit on a bipartisan basis,” Ms. Yellen said. “The vast majority of the debt subject to the debt limit was accrued prior to the Administration taking office.

Source: Read Full Article