Democrats in the House and Senate are dreading negotiating the debt ceiling with Republicans, warning that it could lead to economic ruin and a recession.
For days, Democrats have focused on one outcome: not reaching an agreement with Republicans about raising the debt ceiling before the summer.
This fixation overlooks the far more likely scenario: agreeing to spending cuts that would win over Republican support for raising the debt ceiling.
Remarks Treasury Secretary Janet Yellen made prompted the dire predictions from Democrats.
Yellen told House Republicans that the debt ceiling would need to be raised by June.
Yellen called for lawmakers to move quickly in raising the debt ceiling to give the government time to meet its financial obligations and “protect the full faith and credit of the United States.”
The Treasury Secretary elaborated at length about her speculations regarding what would go wrong if a deal isn’t reached, saying it would cause “irreparable harm to the U.S. economy.”
Her comments over the weekend also noted that irreparable harm would occur to the “livelihoods of all Americans and global financial stability.”
The Treasury Secretary explained that this would lead to “borrowing costs” increasing, which would mean “every American” would encounter an increase in their borrowing costs.
She also asserted that failing to pay bondholders, Social Security recipients, members of the military, etc., “would undoubtedly cause a recession in the U.S. economy and could cause a global financial crisis.”
Yellen’s comments have been amplified by the White House, which has added to the doomsday predictions, with White House Press Secretary Karine Jean-Pierre claiming the GOP was “threatening to kill millions of jobs and 401(k) plans” in their request to only consider raising the debt limit under these conditions.
