US Treasury Secretary Janet Yellen on Sunday issued a stark warning that a failure by Congress to act on the debt ceiling could trigger a "constitutional crisis" that also would call into question the federal government's creditworthiness.
The negotiations on the debt ceiling should not take place"with a gun to the head of the American people," US Treasury Secretary Janet Yellen said. REUTERS/ Samuel Rajkumar/ File photo
The negotiations on the issue should not take place "with a gun to the head of the American people," Yellen told the ABC program "This Week." "It's Congress's job to do this. If they fail to do it, we will have an economic and financial catastrophe that will be of our own making," Yellen said. Washington regularly sets a limit on federal borrowing. Currently, the ceiling is equal to roughly 120% of the country's annual economic output. The debt reached that ceiling in January and the Treasury Department has kept obligations just within the limit, but by July or August, Washington could have to stop borrowing altogether.
Democratic Senate Majority Leader Chuck Schumer last week began to clear the way for a vote for a bill that would suspend the government's debt limit for two years without conditions. But Republicans in the Senate and House have said that they would not vote for such a measure.
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