UPDATED 11:55 AM PT – Tuesday, September 28, 2021
Treasury Secretary Janet Yellen warned lawmakers that Congress has until October 18 to raise the debt ceiling or face economic calamity. In a letter to House Speaker Nancy Pelosi (D-Calif.) Tuesday, she said if Congress fails to act then the Treasury is “likely to exhaust its extraordinary measures” and the U.S. would default on its debt for the first time in history.
Yellen cautioned this may have severe consequences as the full faith and credit of the U.S. will be questioned and a recession would most likely be unavoidable. She also raised alarm about the debt ceiling during testimony on Capitol Hill.
“This would be a manufactured crisis we had imposed on this country, which has been going through a very difficult period,” stated the Treasury secretary. “(This country) is on the road to recovery and it would be a self-inflicted wound of enormous proportions.”
This comes as Democrats are trying to push a stopgap bill and get the legislation to Joe Biden’s desk before a government shutdown on October 1.
.@SecYellen: “It is imperative that Congress address the debt limit. If not, our current estimate is the Treasury will likely exhaust its extraordinary measures by October 18th…America would default for the first time in history.” pic.twitter.com/gf9kplwjbr
— CSPAN (@cspan) September 28, 2021
Meanwhile, Sen. Ted Cruz (R-Texas) said Republicans in the upper chamber will unanimously object to Majority Leader Chuck Schumer’s (D-N.Y.) attempt to avoid a filibuster on the debt ceiling. Cruz told reporters Tuesday, “there is no universe” in which he would support making it easier to raise the debt limit.
Schumer is set to request consent to raise the limit with just 50 votes, instead of the currently required 60. However, Cruz said Democrats should pass the measure as part of their reconciliation package.