No good options if Congress fails to raise the debt limit, Yellen says

Once that date hits, “really that’s it,” Yellen said on “This Week.” “We have been using extraordinary measures for several months now, and our ability to do that is running out.”

The debate over the debt limit has left Democrats and Republicans in a deadlock, and so far neither side seems ready to budge. House Minority Leader Hakeem Jeffries said Sunday on NBC’s “Meet the Press” that Democrats are in “lockstep” with Biden, who has called for passing a clean debt ceiling, not tied to any of the spending cuts House Republicans proposed in the bill they passed last month.

Speaking on Fox News’ “Sunday Morning Futures With Maria Bartiromo,” Sen. Mike Lee (R-Utah) said a letter had been sent to Senate Majority Leader Chuck Schumer saying 43 Republicans backed House Republicans in saying they would not consent to passing a debt ceiling increase without “spending cuts and structural budget reform.” He said he expects Senate Republicans to stay united on the issue.

“As Kevin McCarthy, speaker of the House, meets with the White House, it’s imperative that he arrive in a position of negotiating power,” Lee said.

Should Congress fail to come to an agreement before the X date, some analysts have suggested that Biden could invoke the 14th Amendment, which confirms “the validity of the public debt,” to raise the ceiling unilaterally. Legal scholar Laurence H. Tribe wrote of that option in the New York Times on Sunday: “For a president to pick the lesser of two evils when no other option exists is the essence of constitutional leadership, not the action of a tyrant.”

But it’s an option Yellen doesn’t want to White House to have to consider.

“Look, all I want to say is that it’s Congress’s job to do this,” she said. “If they fail to do it, we will have an economic and financial catastrophe that will be of our own making and there is no action that President Biden and the U.S. Treasury can take to prevent that catastrophe.”

If Congress does fail to find common ground, “there are simply no good options,” Yellen said.