US Treasury Secretary Janet Yellen on Monday again urged Congress to raise the US debt limit through bipartisan action as the federal government moves closer to exhausting its borrowing capability, warning of economic harm.
The move would not increase government spending or approve future spending, she said in a statement, adding: “It simply allows Treasury to pay for previously enacted expenditures. Failure to meet those obligations would cause irreparable harm to the US economy and the livelihoods of all Americans.”
The United States is projected to exhaust its borrowing authority in October and failure to approve an increase in the statutory debt limit – now at $28.5 trillion- could trigger another federal government shutdown or a debt default.
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Yellen, who earlier urged action in a July 23 letter to US lawmakers, noted that the majority of the debt accrued prior to the Biden administration and said Congress should act “as it has in the past to protect the full faith and credit of the United States,” calling it “a shared responsibility.”
But Senate Republican Leader Mitch McConnell last week said Democrats, who narrowly control the chamber, should act on their own to address the issue.
Meanwhile, the Treasury Department has already announced measures such as suspending investments in employee health benefits funds to preserve the government’s borrowing authority.