The way to ensure the government can keep paying its bills is to raise or suspend the debt limit, Treasury Secretary Janet Yellen told lawmakers Friday — not prioritize payments, as some Republicans have proposed.
"In my assessment and those of economists across the board, a default on our debt would trigger an economic and financial catastrophe," Yellen said."I urge all members of Congress to come together to address the debt limit without conditions and without waiting until the last minute."known as the debt ceiling, in January
Yellen's comments came during testimony before the House Ways and Means Committee, where she spoke about President Biden's. The Treasury Department has been using so-called extraordinary measures to keep paying the bills since the government hit the debt limit. In a letter to congressional leaders, Yellen previously said that the government could be unable to pay the bills as soon as June.
But Yellen pushed back on the possibility of prioritizing payments, calling it"default by another name." She said that not raising the debt limit would affect the government's ability to pay benefits and would. On prioritization, she noted Fitch Ratings recently stated a failure to pay all of the bills could potentially lead to a credit rating downgrade.
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