Yellen Doubles Down On Support For Nixing The Debt Ceiling

WASHINGTON, DC - SEPTEMBER 30: Janet Yellen, U.S. Treasury secretary, listens at a House Financial Services Committee hearing on oversight of the Treasury Department and Federal Reserve coronavirus pandemic response ... WASHINGTON, DC - SEPTEMBER 30: Janet Yellen, U.S. Treasury secretary, listens at a House Financial Services Committee hearing on oversight of the Treasury Department and Federal Reserve coronavirus pandemic response on Capitol Hillon September 30, 2021 in Washington, DC. The Treasury secretary this week warned in a letter to congressional leaders that her department will effectively run out of cash around Oct. 18 unless Congress suspends or increases the debt limit. (Photo by Al Drago-Pool/Getty Images) MORE LESS
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October 10, 2021 11:02 a.m.

Treasury Secretary Janet Yellen on Sunday reiterated her support for axing the debt ceiling days after 11 Republicans helped Democrats pass a two-month extension, following Senate Minority Leader Mitch McConnell (R-KY) backtracking from his brinksmanship on the debt ceiling in an offer to Majority Leader Chuck Schumer (D-NY).

Appearing on ABC News, Yellen was asked whether she has convinced President Biden to back her support for eliminating the debt ceiling.

Yellen replied that it’s up to Congress to make the change while reiterating her support for nixing the debt ceiling.

“I believe that once Congress and the administration have decided on spending plans and tax plans, it’s simply their responsibility to pay the bills that result from that,” Yellen said. “And that means we have had deficits for most of the post war period and that means raising the debt ceiling.”

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Yellen stressed that addressing the debt ceiling is “a housekeeping chore.”

“We should be debating the government’s fiscal policy when we decide on those expenditures and taxes, not when the credit card bill comes due,” Yellen said.

Yellen also doubled down on her opposition to minting a trillion dollar coin, calling it a “gimmick” that “jeopardizes the independence” of the Federal Reserve, before arguing that the country shouldn’t ever find itself in a position where the 14th Amendment has to be invoked if Congress doesn’t act on the debt limit by Dec. 3.

“I don’t believe any President has ever had to make a decision about what they would do if Congress failed to raise the debt ceiling,” Yellen said. “I can’t imagine our being there on December 3rd. I have confidence that Speaker (Nancy) Pelosi and Leader Schumer will be able to manage this so that we don’t face the situation.”

Despite offering Democrats an opportunity to kick the can a bit further down the road on the debt ceiling after a weeks-long standoff, McConnell warned Biden on Friday that Republicans won’t help raise the debt ceiling later this year, setting up another squabble with Democrats heading into December.

“Last night, Republicans filled the leadership vacuum that has troubled the Senate since January. I write to inform you that I will not provide such assistance again if your all-Democrat government drifts into another avoidable crisis,” McConnell wrote in the letter to Biden.

Yellen stated her support for axing the debt ceiling when asked by Rep. Sean Casten (D-IL) during a House Financial Services committee hearing late last month.

“Yes I would, because I believe when Congress legislates expenditures and puts in place tax policy that determines taxes, those are the crucial decisions Congress is making. And if to finance those spending and tax decisions it’s necessary to issue additional debt, I believe it’s very destructive to put the President and myself, the Treasury Secretary, in a situation where we might be unable to pay bills that result from those past decisions,” Yellen said.

Watch Yellen’s remarks below:

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