Treasury Secretary Janet Yellen said the only good outcome in the current US debt standoff is for Congress to raise the ceiling.
“What global markets and American households and businesses need to see is that we have a Congress that is committed to paying the bills,” Yellen said Friday in an interview with Bloomberg Television.
“If Congress fails to do that, it really impairs our credit rating,” Yellen added, speaking on the sidelines of a Group of Seven gathering of finance officials in Niigata, Japan.
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Yellen has mostly declined to spell out what her department would do if Congress fails to raise or suspend the debt limit before the Treasury finds itself unable to cover all the government’s obligations.
Back in Washington, President Joe Biden and House Speaker Kevin McCarthy postponed a meeting on the debt ceiling set for Friday. People familiar with the talks said the postponement was a sign that staff-level talks were yielding progress.
ALSO READ: US on the brink of financial crisis? Treasury warns of total cash crunch as early as June 1
{{/usCountry}}ALSO READ: US on the brink of financial crisis? Treasury warns of total cash crunch as early as June 1
{{/usCountry}}Biden and congressional Republicans have been locked in disagreement for weeks over raising the US federal government’s $31.4 trillion borrowing limit. GOP leaders have demanded promises of future spending cuts before they approve a higher ceiling. Biden has insisted on a “clean” increase, with budget talks kept separate.
The government reached the statutory cap on borrowing in January and the Treasury has since been using special accounting measures to make cash available. Yellen has told Congress those measures could run out as soon as June 1.