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Treasury Secretary Yellen says she wants to get rid of the debt ceiling as McConnell threatens another default standoff in 2 months

Markets Insider
Markets Insider
 2021-10-11

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Senate Minority Leader Mitch McConnell and Treasury Secretary Janet Yellen.
  • Janet Yellen reiterated her personal support of getting rid of the debt limit.
  • Mitch McConnell insists the Senate GOP will blockade the next effort to raise the debt ceiling, pushing the US toward defaulting on its debt.
  • "I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement," he wrote to Biden.

The US just barely avoided breaching the debt ceiling and defaulting on the national debt in October, and two of the main players are sounding different tunes on the future. Republicans are already firing warning shots about another fight coming in just two months, while some Democrats are eyeing ways to defuse the GOP's increasing use of the debt ceiling as a political grenade.

Treasury Secretary Janet Yellen reaffirmed her support of getting rid of the debt ceiling on Sunday, only days after Senate Minority Leader Mitch McConnell insisted that Senate Republicans will have another debt-ceiling fight in December. His efforts to derail President Joe Biden's domestic agenda could risk a first-ever default on the national debt.

In an interview on ABC News "This Week" on Sunday , Yellen said she wants to get rid of the debt limit but added it was a personal choice. She insisted it's ultimately up to Congress to act.

Yellen also once again dismissed the idea of the Treasury Department minting a "trillion-dollar coin" and depositing it at the Federal Reserve, repeating her characterization of it as a "gimmick" that could backfire.

Just last Thursday, Senate Republicans dropped their weeks-long blockade of raising the debt limit and paved the way for a two-month extension through December 3, to the anger of conservatives such as Sens. Ted Cruz of Texas and Lindsay Graham of South Carolina.

On Friday, McConnell said Republicans wouldn't give any more help to Democrats when it comes to the debt limit, teeing up another political brawl in late November.

"I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement," the Kentucky Republican wrote in a fiery letter to Biden. "Your lieutenants on Capitol Hill now have the time they claimed they lacked to address the debt ceiling."

He added that Democrats "cannot invent another crisis and ask for my help," even as McConnell effectively engineered the standoff along with its temporary resolution.

McConnell argued Democrats must employ an arduous procedure known as reconciliation to approve a debt-limit hike on their own, the same demand he's made since July. The process allows some measures to be passed with only a simple majority, shielding it from the filibuster's 60-vote threshold in the Senate.

Congressional Democrats are using reconciliation to approve a $3.5 trillion social spending plan, though major cuts to plan are likely to appease moderates given their threadbare majorities in the House and Senate.

They want to approve the plan on October 30, but that appears to be a long-shot since Democrats haven't settled on a price tag yet. It raises the possibility of a major Congressional traffic jam in late fall. McConnell may be banking on that.

Read the original article on Business Insider

Comments / 737

Ronnie Wilcox
10-11

If the debt ceiling was done away with then Congress would spend America into the poor house

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Cheri Williams
10-11

threat after threat after threat.Lets get people working for the United States yes United and vote these people home.

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Drew Jive
10-11

First of all, Yellen wants to tie the hands of the US Senate, and become an absolute dictator with US finances that would to disaster. - - - - These ideas are why Congress is freezing on Biden's agenda and now Yellen's thinking as its dangerous in the same way banana republics are.

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