Yellen urges Congress to raise or suspend the debt limit

What is the reason for the growth of the US economy?

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(CNN) -

Treasury Secretary Janet Yellen is weighing the debt limit in a new statement this Monday morning, urging Congress to pass something on a bipartisan basis or else risk a "irreparable damage" to the US economy.

“As I said in my letter to Congress on July 23, raising or suspending the debt limit does not increase government spending, nor does it authorize spending for future budget proposals.

It simply allows the Treasury to pay the previously approved expenses.

Failure to meet those obligations would cause irreparable harm to the US economy and the livelihoods of all Americans, ”Yellen said.

He noted that during the Trump administration, the debt ceiling was raised three times in a bipartisan fashion.

Yellen continued: “Congress should do it again now by raising or suspending the debt limit in a bipartisan way.

The vast majority of the debt subject to the debt limit was accrued prior to the inauguration of this administration.

This is a shared responsibility, and I urge Congress to come together on a bipartisan basis as it has done in the past to protect America's full faith and credit. "

Consumers in the US are more in debt than ever 0:55

The start of a tough bid

Despite Yellen's statement, all signs point to a major battle, with potentially devastating economic consequences, in September: Senate Minority Leader Mitch McConnell gave a signal last week to expect zero votes from Republicans. to raise the debt ceiling, pressuring Democrats to include an increase in the budget reconciliation process.

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However, Senate Majority Leader Chuck Schumer has urged negotiators to keep the debt cap out of this and get Republicans on the record.

We should have an idea as early as this Monday on whether Democrats will try to pass the debt limit increase on their own in the reconciliation process in the fall, or if they will set up a showdown with Republicans.

Yellen's letter makes clear that the administration is aligned with Schumer, setting the stage for a showdown with what is at stake: the full faith and credit of the US government.

U.S. Congress Janet Yellen