Yellen: ‘No good options’ if Congress fails to act on debt

Her comments added even more urgency to a high-stakes meeting Tuesday between Biden and congressional leaders from both parties.

“Whether it’s defaulting on interest payments that are do on the debt or payments for Social Security recipients or to Medicare providers, we would simply not have enough cash to meet all of our obligations,” she said. “And it’s widely agreed that financial and economic chaos would ensue.” House Republicans on April 26 passed a bill that would raise the debt limit but impose significant federal spending cuts. But those cuts are unlikely to win the support of all Republicans in the Democratic-controlled Senate, and Biden has said he will only negotiate about government spending once Congress takes the risk of default off the table.

Yellen was asked on ABC whether Biden could bypass Congress by citing the Constitution’s 14th Amendment that the “validity” of U.S. debt “shall not be questioned.” Yellen did not answer definitively, but said it should not be considered a valid solution.

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