Janet Yellen: US treasury secretary warns of debt ceiling 'catastrophe'

US Treasury caput Janet Yellen has warned a nonaccomplishment to rise the US's indebtedness ceiling could person dire consequences.

Without an statement to summation what the national authorities tin borrow, it could tally retired of wealth by aboriginal June.

At that constituent the national authorities mightiness not beryllium capable to marque wage, payment and different payments.

"It's Congress's occupation to bash this. If they neglect to bash it, we volition person an economical and fiscal catastrophe that volition beryllium of our ain making," she said.

In an interrogation with ABC News connected Sunday Ms Yellen said indebtedness ceiling negotiations should not instrumentality spot "with a weapon to the caput of the American people."

But clip is moving retired for an agreement.

On Tuesday President Biden volition conscionable Republican leaders to inquire them to hold to raising the existent $31.4tn (£25.12tn) limit.

Congress typically ties support of a higher indebtedness ceiling to stipulations connected fund and spending measures.

Last period the House of Representatives passed a measure to rise the ceiling, presently astir adjacent to 120% of the country's yearly economical output, but included successful the measure sweeping spending cuts implicit the adjacent decade.

President Biden wants Congress to hold to rise the indebtedness ceiling, with nary conditions. President Biden has said helium volition not negociate implicit the summation and volition sermon fund cuts aft the contented is resolved.

Failure to find cross-party statement connected the contented could effect successful a "constitutional crisis" Ms Yellen said.

The Biden medication is considering whether determination is scope wrong the constitution for the president to proceed issuing caller indebtedness without the support of Congress, but volition this week strive to debar that scenario.

"We should not get to the constituent wherever we request to see whether the president tin spell connected issuing debt. This would beryllium a law crisis," Ms Yellen told ABC.

The indebtedness ceiling has been raised, extended oregon revised 78 times since 1960, often with negotiations going down to the wire.

In the end, the menace of a default connected authorities payments including indebtedness obligations has ever led to compromise. The US has ne'er defaulted, an lawsuit that would upend planetary fiscal markets and person far-reaching economical impacts.

But delaying a solution besides had antagonistic consequences, Ms Yellen said successful a missive to Congress past week.

"We person learned from past indebtedness bounds impasses that waiting until the past infinitesimal to suspend oregon summation the indebtedness bounds tin origin superior harm to concern and user confidence, rise short-term borrowing costs for taxpayers, and negatively interaction the recognition standing of the United States," she wrote.