While President Joe Biden and House Speaker Kevin McCarthy are scheduled to negotiate on the issue of raising the debt ceiling on the 9th, Treasury Secretary Janet Yellen warned again of the possibility of default.
Appearing on ABC on the 7th, Secretary Yellen said, “U.S. Treasury bonds are the most secure underlying bonds of the international financial system.”
“If Congress doesn’t act as the (default) date approaches, we’re going to see the consequences in financial markets,” she said.
When asked about the possibility of President Biden’s invocation of Article 14 of the Amendment, Minister Yellen said, “There is no way to protect the US financial system and economy except for Congress to do its job,” adding, “The president has to consider whether to continue issuing debt.” It shouldn’t go that far. It’s a constitutional crisis,” he said.
“If Congress can’t do its job, then there are no good options in that case,” she added. Some US constitutional scholars believe that the 14th Amendment to the Constitution, which states that “all debts of the federal government must be honoured,” gives the president the power to continue issuing debt without raising the debt ceiling. Previously, Secretary Yellen sent a letter to House Speaker McCarthy and others on the 1st, warning that default could occur as early as the 1st of next month if the debt ceiling is not raised.
The U.S. Treasury Department asked Congress to raise or suspend the application of the debt ceiling, saying it had entered special measures in response to the debt ceiling being reached in January.
However, negotiations have so far stalled, with Republicans linking higher debt ceilings with cuts in fiscal spending, and the White House demanding an unconditional increase in debt ceilings.