- Treasury Sec. Janet Yellen reiterated the consequences of failing to raise the debt ceiling.
- She said defaulting on the national debt could strip Social Security benefits from seniors and veterans.
The nation's top Treasury official just issued another warning on the consequences of failing to raise the debt ceiling.
On Tuesday, Treasury Sec. Janet Yellen told officials during a Washington conference that their constituents are greatly at risk if Congress fails to raise the debt limit by the summer. In January, the Treasury Department began to use "extraordinary measures" to keep the US on top of paying its bills, and while Republicans raised the debt limit three times under former President Donald Trump, they are using it as leverage this time around to achieve their own priorities.
Yellen has warned numerous times of the consequences of using the debt limit as a bargaining chip, and she reiterated the economic catastrophe that would result should the US default.
"The solution is simple: Congress must vote to raise or suspend the debt limit. It should do so without conditions, and it should not wait until the last minute," Yellen said during her Tuesday remarks.
"It is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security," she added. "In the longer term, a default would raise the cost of borrowing into perpetuity. Future investments — including public investments — would become substantially more costly."
The US has never defaulted on its debt, and amid these negotiations, Speaker of the House Kevin McCarthy said earlier this month that "defaulting on our debt is not an option. But neither is a future of higher taxes, higher interest rates, and an economy that doesn't work for working Americans."
While McCarthy has not specified what exactly he is looking to cut in debt limit negotiations — the only thing he's made clear is that Social Security and Medicare are off the table — the White House has been adamant that raising the debt limit should be bipartisan, not a bargaining chip tied to demands for spending cuts.
"Congressional Democrats and Republicans in Congress voted three times in the Trump administration to lift the debt ceiling," White House Press Secretary Karine Jean-Pierre said during a press briefing.
"And let's not forget this has happened 78 times since 1960, 49 times under Republican presidents and 29 times under Democratic presidents," she added. "So, this has been done before. It's their constitutional obligation to do this."
As Insider previously reported, Biden could get around Congress through a process known as minting the coin, in which Biden could deposit a $1 trillion platinum coin in the Federal Reserve thanks to a loophole in the types of coins the Treasury can mint. But Yellen has dismissed that idea on numerous occasions and remains committed to Congress lifting the debt limit once again.
"It truly is not by any means to be taken as a given that the Fed would do it, and I think especially with something that's a gimmick," Yellen previously said about the coin. "The Fed is not required to accept it, there's no requirement on the part of the Fed. It's up to them what to do."