U.S. Treasury Secretary Janet Yellen recently made surprising statements regarding the Democrats’ role in determining the nation’s current debt limit. Specifically, Yellen called for Congressional Democrats to address the national debt limit on their own, should theRepublicans continue to act in a partisan manner. Yellen justified her recommendation based on the avoidance of a national default.
In October, legislators agreed to temporarily raise the borrowing limit for the federal government to $28.9T in legislation. Joe Biden subsequently signed the legislation into law, which permits the United States Treasury to pay various debts through early December.
However, Yellen has repeatedly encouraged Congress to act in as bipartisan a manner as possible in order to extend the United States’s ability to borrow. Without this ability, a series of dangerous economic consequences could arise.
“Should [negotiations] be done on a bipartisan basis? Absolutely,” Yellen asserted in remarks to the Washington Post as she travelled to Dublin.
It would be better for Democrats “to do it by themselves,” rather “that defaulting on teh debt to teach the Republicans a lesson,” Yellen mused.
“Now, if [Republicans are] not going to cooperate, I don’t want to play chicken and end up not raising the debt ceiling,” Yellen continued ominously, adding that she envisions such a scenario as “the worst possible outcome.”
In a different interview with Reuters, Yellen continued to make additional remarks regarding the American economy. For instance, she noted that the United States might eventually consider the possibility of lowering various tariffs on China, provided that it could occur in a largely reciprocal way.
In addition, Yellen also provided some insight into the potential support that technology companies may offer to global taxation rules, as well as Biden’s anticipated Federal Reserve chair appointment.
Currently, the U.S. Treasury Secretary is in Ireland to attend a tax policy meeting. Yellen will then travel to Scotland to attend the United Nations Climate Change Conference.