Politics Debt limit was focus of McConnell and Yellen call
Yellen triggers alarm bells over debt ceiling cliff
Treasury Secretary Janet Yellen is setting off alarm bells over a looming brawl over the nation's borrowing limit that could spark a global economic crisis if Congress fails to take action. Yellen's warning, delivered to congressional leaders on Wednesday that the country could default on its debt as soon as next month is casting new urgency on the behind-the-scenes discussions about how to raise the debt ceiling. No clear end game is in sight.Democrats could need 10 GOP votes to raise the debt ceiling if Republicans filibuster the measure. Democrats have only 50 votes in the Senate, and GOP leaders have indicated they will not help raise the borrowing limit.
The debt limit was part of a call between Treasury Secretary Janet Yellen and Senate Minority Leader Mitch McConnell on Wednesday, a person familiar with the conversation told CBS News. As the U.S. barrels closer toward running out the cash to pay its bills, Yellen has warned inaction would lead to catastrophic economic consequences.
The United States could hit the so-called X-date — when measures keeping the government running are exhausted — as soon as next month, leading to the government to default on its debts. But McConnell has said Republicans would not vote to raise the debt ceiling.
Biden thinks McConnell will blink on debt limit
The White House, sources say, wants to include a hike in a bill that would require GOP votes to pass.Multiple Democratic sources on the Hill and with knowledge of the White House’s thinking said the administration wants to include a suspension of the debt limit — a legal cap on how much the U.S. can borrow — in a continuing resolution to fund the government. Such a bill, which Congress is expected to consider as early as this month, would require 60 votes to pass in the Senate, meaning at least 10 Republicans would need to vote to advance the measure.
"With a Democratic President, a Democratic House, and a Democratic Senate, Democrats have every tool they need to raise the debt limit. It is their sole responsibility," McConnellWednesday. "Republicans will not facilitate another reckless, partisan taxing and spending spree."
McConnell has suggested Democrats include a provision to raise the debt ceiling in the $3.5 trillion reconciliation package making its way through Congress.
White House press secretary Jen Psaki said Thursday the call between Yellen and McConnell was "not a political call" but to "really convey what the enormous dangers of default would be." Psaki said the president wants to maintain the full faith and credit of the U.S., and the debt limit is not a political issue and shouldn't be a partisan issue.
Senate GOP Won't Raise Debt Limit, But Data Shows $7.8 Trillion Heaped On Under Trump
While Republicans are blaming Democrats for reckless spending, about $7.8 trillion of the overall national debt was accumulated under President Donald Trump.Republicans, however, are refusing to pledge that action, digging their heels into the trenches in a standoff over how to increase the government's borrowing authority.
"Our view is that this should be bipartisan as it has been in the past," Psaki said.
Treasury spokesperson Lily Adams said Yellen will "continue to talk to Republicans and Democrats about the critical need to swiftly address the debt ceiling in a bipartisan manner, to avoid the catastrophic economic consequences of default."
Democrats have blasted Republicans for their unwillingness to address the debt ceiling after the suspension of the debt limit expired over the summer forcing the Treasury Department to resort to so-called extraordinary measures to continue paying the bills. The debt limit was suspended on a bipartisan basis three times under President Trump including most recently in 2019.
"We didn't play games. We didn't risk the credit of the country. We did it," Senator Chuck Schumer said on Tuesday of past bipartisan votes. "Senator McConnell seems to be trying to break new ground by saying that we should let the country default."
White House warns of an economic recession if the debt ceiling is hit
WASHINGTON (AP) - Senate Minority Leader Mitch McConnell has warned Treasury Secretary Janet Yellen he is not budging on his demand that Democrats go it'Hitting the debt ceiling could cause a recession. Economic growth would falter, unemployment would rise, and the labor market could lose millions of jobs,' a new White House fact sheet reads.
Schumer said there are a number of different options on the table he's discussing with Speaker Pelosi and President Biden, but it must be done. He continued to say he hopes it will be addressed in a bipartisan way.
Last week, to Congressional leaders warning a delay to raise and suspend the debt limit would likely cause "irreparable damage to the U.S. economy and global financial markets."
On Wednesday, the lobbying group the Business Roundtable also sent a letter to Congressional leaders on behalf of the CEOs of some of the country's biggest companies urging them to act swiftly and address the debt ceiling.
"Failure to lift the U.S. federal debt limit to meet U.S. obligations would produce an otherwise avoidable crisis and pose unacceptable risk to the nation's economic growth, job creation and financial markets," the letter read.
Even former GOP treasury secretaries reportedly tried to get Mitch McConnell to help avoid a debt default. He refused. .
Treasury Secs. Steve Mnuchin and Henry Paulson warned McConnell of the consequences of not raising the debt ceiling as the US approaches default.The Washington Post reported on Wednesday that former GOP Treasury secretaries Henry Paulson and Steve Mnuchin met with Senate Minority Leader Mitch McConnell to attempt to resolve the debt ceiling standoff between Democrats and Republicans, according to people familiar with the conversations.