Yellen says ‘every responsible member of Congress’ must agree to raise debt ceiling

Treasury Secretary Janet Yellen on Monday insisted that “every responsible member of Congress” must agree to raise the debt ceiling to avoid “catastrophe” after the U.S. reached its borrowing limit last month.

“America has paid all of its bills on time since 1789, and not to do so would produce an economic and financial catastrophe, and every responsible member of Congress must agree to raise the debt ceiling,” Yellen said on ABC’s “Good Morning America.”

The U.S. reached its borrowing limit of around $31.4 trillion in January, and lawmakers have been locked in an across-the-aisle conflict over allowing the federal government to take on more debt.

The White House and many Democrats are pushing to raise the borrowing limit quickly, while Republicans are pressing for spending cuts as a condition to raising the ceiling. 

Yellen has been implementing so-called “extraordinary measures” to maneuver funds and help the government pay its bills until sometime this summer, but the country can’t take on any new debt to pay what it owes until Congress lifts or suspends the debt ceiling. 

Raising or suspending the debt ceiling does not add to the national debt, but simply allows the Treasury Department to pay expenses already approved by Congresses and presidents.

The Treasury secretary and economists have sounded alarms that the U.S. could tip into a deep recession if lawmakers don’t take action on the borrowing limit. Yellen has said she’s “nervous” that defaulting on the debt could put the U.S. economy in a tailspin as the federal government would be unable to spend money and likely cause a financial crisis.

But Yellen on Monday said the economy is “remaining strong” as inflation appears to cool.

“You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years. What I see is a path in which inflation is declining significantly, and the economy is remaining strong,” she said.

The U.S. added 517,000 jobs in January, far above economists’ expectations, as the unemployment rate dropped to 3.4 percent.