Yellen to Congress: Lift debt limit beyond reach through 2024 election
WASHINGTON — Treasury Secretary Janet Yellen called on Congress to raise the nation’s statutory debt limit high enough that it would not be reached until after the 2024 election, a move that would neutralize the ability of Republicans to block the United States from paying its bills in order to extract legislative concessions from Democrats.
Republicans are expected to use the nation’s borrowing cap as leverage if they ultimately retake one or both chambers of Congress next year. In previous years, they have demanded deep spending cuts in exchange for voting to increase the debt limit, leading to standoffs that have resulted in government shutdowns, rattling markets and threatening the nation’s credit rating.
Yellen said she believes that Democrats, who will retain control of the House and the Senate through at least the end of the year, should eliminate it as an issue for the rest of President Joe Biden’s term.
“I would love to see it get done,” Yellen said in an interview Saturday with The New
York Times. “I always worry about debt ceiling.”
Yellen previously called for the debt limit to be abolished, but Biden has appeared to dismiss that idea.
Congress raised the debt limit by $2.5 trillion to about $31.4 trillion this past December. That level is expected to be reached sometime in early 2023, although the Treasury Department can likely delay the so-called X-date using “extraordinary” measures until the second half of next year, according to the Bipartisan Policy Center.
Republicans, including Rep. Kevin McCarthy of California, have suggested that debt ceiling increases should be tied to reconsideration of current spending. And former President Donald Trump has in recent weeks criticized Republicans for not using the debt ceiling more effectively to force concessions from Democrats.
Yellen has warned that failing to lift or suspend the borrowing cap could cause an economic and financial calamity. While the debt limit is a cap on the total amount of money that the federal government is authorized to borrow to fulfill its financial obligations, lifting it does not authorize any new spending and in fact simply allows the U.S. to finance existing obligations.
In the interview, Yellen said that she would support a measure by Democrats to prevent the issue from being weaponized for political reasons.
“I think it’s just compromising the credit of the United States,” Yellen said.