06/24/2021

Treasury Secretary Yellen to Congress: Increase Debt Limit

She believes they should address the debt limit before July 31

Testifying before a Senate Appropriations subcommittee yesterday, Treasury Secretary Janet Yellen urged Congress to address the debt limit before a current suspension expires on July 31. She emphasized that the pandemic makes it difficult to determine how long Treasury could service the debt and make payments after the suspension expires. The Wall Street Journal reports the government could reach that point in August.

According to the Associated Press, Yellen stated defaulting on the national debt should be regarded as "unthinkable" because it would have "absolutely catastrophic consequences" that could precipitate a financial crisis.

"I would plead with Congress simply to protect the full faith and credit of the United States," Yellen said.

The debt limit, which has been suspended for two years, currently sits at $28.3 trillion. This figure increased significantly amid COVID-19 as Congress passed trillions of dollars in economic relief and support.

Lawmakers in both parties have reportedly suggested addressing the debt limit in the bipartisan infrastructure package.

This article was provided to OSAE by ASAE's Power of A and Inroads.