Secretary of the Treasury Janet Yellen sent yet another letter to House Speaker Kevin McCarthy (R-CA) on Monday afternoon, again warning that the United States is growing ever closer to defaulting on its debt unless a bill is passed by Congress and signed by President Joe Biden to increase the nation's debt limit.
Notably, Yellen continues sending these letters to McCarthy — the man who, along with House Republicans, already passed a bill that would raise the debt ceiling and avoid default — while failing to dispatch similarly snide letters to President Biden or Senate Majority Leader Chuck Schumer (D-NY). Perhaps a letter could have been sent to Biden scolding him for spending more than two months earlier this spring ignoring requests to negotiate from McCarthy as a default loomed? Or a letter to Leader Schumer asking why he and Democrats in the upper chamber didn't put together any sort of a plan to avoid default?
Nope, all of Yellen's warnings go to Speaker McCarthy who clearly outpaced and outmaneuvered D.C. Democrats and partisan pundits by doing what many believed wouldn't happen: passing a bill with only GOP support to avoid a default, raise the debt ceiling, and cap discretionary spending at FY 2022 levels that Democrats previously bragged about setting. In doing so, McCarthy forced Biden to negotiate as he realized he was losing the narrative.
In any case, Yellen ratcheted up the pressure with her latest missive to McCarthy by saying her department estimates "that it is highly likely that Treasury will no longer be able to satisfy all of the government's obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1."
New Yellen letter: "I am writing to note that we estimate that it is highly likely that Treasury will no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1." pic.twitter.com/8curdpnnEP
— Spencer Brown (@itsSpencerBrown) May 22, 2023
Yellen said Treasury's latest projection was based on updated, additional "currently available data" but that "federal receipts, outlays, and debt could vary from these estimates." She also pledged to "continue to update Congress as more information becomes available."
Again, Yellen tried scolding McCarthy:
We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States. In fact, we have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June. If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.
I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible.
Well, Janet, Congress did act — weeks ago — "to protect the full faith and credit of the United States" when the House passed the Limit, Save, Grow Act. The only people on Capitol Hill who haven't done their job are apparently Senate Democrats.
As far as Yellen's snide remark about "waiting until the last minute to suspend or increase the debt limit," that is a criticism that belongs only with President Biden and his West Wing advisors. Biden spent two months refusing to come to the table to work on a deal with Speaker McCarthy. As a result, no deal has yet been announced. Now that Biden has caved and agreed to negotiate terms, he could have started the process *two fulls months* earlier and staved off the last-minute brinksmanship Yellen now decries.
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