By Oliver Gray
Investing.com - Treasury Secretary Janet Yellen has urged lawmakers to increase the federal debt limit, attributing the Biden administration’s costly economic policies as instrumental in driving a "historic recovery" from the COVID-19 pandemic.
In her upcoming speech at a Washington conference, Yellen highlights that the ongoing conflict between House Republicans and President Biden over raising the debt ceiling could jeopardize all progress made during recent years. The U.S. outstanding debt reached its legal cap of $31.4 trillion earlier this year in January.
To avoid defaulting and maintain funds availability, the Treasury Department employed special accounting techniques while warning that an eventual default might lead to an "economic and financial catastrophe." New guidance is anticipated from Yellen regarding how long Congress has before facing real danger of default due to not lifting the ceiling.
At a Sacramento Metropolitan Chamber of Commerce event, Yellen discussed key legislative accomplishments by President Biden's administration which allocated over $1 trillion towards infrastructure development, semiconductor research and manufacturing initiatives, as well as clean energy incentives.
The resulting growth and job creation reduced overall unemployment rates down to 3.5% with record lows of 5% among African Americans; however, this spending also contributed significantly towards inflationary pressures fueling Republican resistance during current debt-limit negotiations.
Demanding future spending cut commitments in exchange for increasing the limit is House Speaker Kevin McCarthy's stance on handling this issue; conversely, President Joe Biden insists on raising it unconditionally. A vote on their proposal concerning raising the debt ceiling is scheduled by House Republican leaders later this week.