U.S. Senate's McConnell tells Yellen Democrats must raise debt ceiling themselves
WASHINGTON, Sept 16 (Reuters) - Mitch McConnell, the Senate's top Republican, has told Treasury Secretary Janet Yellen that congressional Democrats will have to raise the U.S. debt ceiling on their own, even as she warns of a default and new financial crisis if lawmakers do not raise the federal borrowing limit.
McConnell spokesman Doug Andres said on Thursday the Senate Republican leader in a telephone conversation a day earlier "repeated to Secretary Yellen what he has said publicly since July: This is a unified Democrat government, engaging in a partisan reckless tax and spending spree. They will have to raise the debt ceiling on their own and they have the tools to do it."
President Joe Biden's fellow Democrats narrowly control both the Senate and House of Representatives. If Congress fails to raise the $28.5 trillion debt limit, it could lead the government to default on its payment obligations.
Yellen said this month that cash and "extraordinary measures" being used to finance the U.S. government temporarily will be "exhausted" during October.
McConnell and other senior congressional Republicans have vowed not to vote for an increase of the debt limit, instead urging Democrats to pass it on their own through a maneuver called reconciliation. McConnell has sought to block numerous parts of Biden's legislative agenda.
House Speaker Nancy Pelosi has said Democrats will not include a provision to raise the borrowing limit in a $3.5 trillion "reconciliation" spending measure they hope to pass this autumn.
Pelosi says the debt limit must be raised to pay for debt incurred under Republican former President Donald Trump, but has not said how this should be done. One possibility would be for Democrats to add a debt ceiling provision to a must-pass bill to keep the government running, expected at the end of September.
Yellen has told lawmakers that a default on U.S. debt obligations would be "unthinkable" Link and "would have absolutely catastrophic economic consequences." She has said that the majority of the debt had accrued prior to the Biden administration and that Republicans and Democrats had previously worked together multiple times to address the borrowing issue.
Yellen warns Congress of 'unthinkable' U.S. default risk without
debt limit hike
Yellen warns Congress again on U.S. debt limit as Republicans balk
Reporting by Susan Cornwell; Editing by Will Dunham
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.