‘Very Irresponsible’: Yellen Blasts House Republicans For Wanting Spending Cuts Amid Debt Showdown

Ben ZeisloftJanuary 21, 2023

Treasury Secretary Janet Yellen It was stated on Saturday that House Republicans In the midst of renewed economic uncertainty, it is possible to negotiate spending cuts. debt ceiling Battle are “very irresponsible.”

Official informed Kevin McCarthy, House Speaker (R-CA), and other legislators in a recent letter The debt ceiling is an arbitrary limit on the amount of the national debt Congress has exceeded the limit of almost $31.4 trillion set by law as of this week. Yellen made the following statement in an interview According to the Associated Press, House Republicans who call for spending cuts run the risk of a “self-imposed calamity in the United States and the world economy.”

“This is about paying bills that have already been incurred by decisions with this and past Congresses and it’s not about new spending,” She said that sustainable expenditures can’t be sustained, and she agreed. “negotiated over whether or not we’re going to pay our bills.”

Yellen, who is currently touring multiple African countries for a trip centered on the continent’s economic development, said that the position of withholding a debt ceiling hike until more spending cuts occur is “a very irresponsible thing to do” Added to that, the position could lead to serious consequences for those in it. “the day of reckoning.” In her letter to lawmakers, she indicated that investments in the Civil Service Retirement and Disability Fund and Postal Service Retiree Health Benefits Fund were temporarily suspended. “extraordinary measures” The Treasury Department adopted the following measures to maintain the government’s financial viability: They are expected to last until June.

Yellen believes that Congress will be able to defuse the situation as they have a good understanding of the economic calamity that could result from the federal government defaulting. Beyond the possibility of a default, diminished trust in the government’s ability to repay debt can also cause “markets to become quite concerned,” She went on.

In order to maintain deficit-driven spendings, the federal government has relied on substantial budget deficits in recent decades. According to the latest fiscal year’s figures, 46% of federal budget was made up by Social Security, Medicare and other health initiatives. data From the Treasury Department, even as maintenance costs The current rise in interest rates across all sectors of the economy has caused the national debt to soar.

Yellen, who was previously the Federal Reserve’s Director, said it in another notice That was last week “failure to meet the government’s obligations” This would refer to “irreparable harm” both the domestic and global financial systems. “Presidents and Treasury Secretaries of both parties have made clear that the government must not default on any obligation of the United States,” She wrote. “Yet the use of extraordinary measures enables the government to meet its obligations for only a limited amount of time.”

McCarthy is scheduled to meet with President Joe Biden in order to discuss the debt limit negotiations. House Republicans called on their Democratic counterparts to explore possible spending cuts. Jason Smith (R,MO) is the chairman of Ways and Means Committee. statement That “reckless spending” Produced “the worst spike in prices in forty years” This can lead to a decrease in living standards.

“Instead of attacking his political opponents, President Biden should be spending this time working with House Republicans to address the debt ceiling in a way that imposes some fiscal sanity. Otherwise, the President is simply scheduling America’s next debt crisis,” He continued. “We can find commonsense solutions to halt reckless spending, put American’s finances on stable footing, and ensure we meet our debt obligations.”