On Monday, Treasury Secretary Janet Yellen took a noteworthy step by sending a letter to House Speaker Kevin McCarthy (R-CA), emphasizing the pressing issue of the United States edging closer to a default on its debt unless Congress acts swiftly to increase the nation’s debt limit. What makes this development intriguing is that Yellen has persistently sent these letters to McCarthy, despite the fact that he and his fellow House Republicans have already passed a bill to raise the debt ceiling and avoid default. Strikingly absent are comparable messages to President Joe Biden or Senate Majority Leader Chuck Schumer (D-NY). One cannot help but wonder why a letter wasn’t written to Biden, reprimanding him for disregarding McCarthy’s pleas for negotiations during the spring, when the threat of default loomed. Alternatively, attention could be turned to Schumer, questioning why his party has yet to propose a concrete solution to prevent a default on the nation’s debt.
Ironically, despite Yellen’s warnings, Speaker McCarthy managed to achieve what many deemed impossible: passing a bill with exclusive GOP support to prevent default, raise the debt ceiling, and cap discretionary spending at FY 2022 levels that Democrats had previously boasted about setting. McCarthy skillfully wielded this achievement as leverage, pressuring Biden to come to the table for compromise, recognizing that he was losing the narrative.
Yellen’s latest letter to McCarthy adds to the mounting pressure, as she asserts that her department’s estimates indicate that “it is highly likely that Treasury will no longer be able to meet all of the government’s obligations if Congress does not act to raise or suspend the debt limit by early June, and potentially as early as June 1.”
Yellen explains that the Treasury’s forecast is based on “currently available data” that has been updated and supplemented. It is worth noting, however, that the government’s actual income, spending, and debt may deviate from these projections. Yellen assures Congress that she will “continue to update” them as more information becomes available.
Yet, it is essential to remind Janet that the House did take action weeks ago by passing the Limit, Save, and Grow Act, a measure aimed at safeguarding the United States’ full faith and credit. The only group failing to fulfill their responsibilities in this matter is the Senate Democrats.
If any criticism should be directed at President Biden and his West Wing advisors, such as Yellen’s sarcastic comment about “waiting until the last minute to suspend or increase the debt limit,” it should come from those quarters. Biden’s refusal to engage in negotiations with Speaker McCarthy for two months stalled progress and prevented a resolution. Therefore, no agreement has been reached. Had Biden initiated discussions two full months ago, instead of succumbing to them only at the eleventh hour, the brinksmanship that Yellen now criticizes could have been entirely avoided.
The nation stands on the precipice of a potentially catastrophic default. It is imperative for all parties involved to set aside political posturing, prioritize the stability of the economy, and swiftly find a solution that raises the debt limit and protects the nation’s financial integrity. The consequences of inaction are far too grave to ignore, and the time for decisive action is now.