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Yellen makes international appeal to put pressure on GOP over debt limit

Congressional leaders were scheduled to meet with President Biden on the debt limit again Friday but the meeting was postponed.

Published: May 11, 2023 11:02pm

U.S. Treasury Secretary Janet Yellen is making an international appeal to put pressure on the GOP over raising the U.S. debt limit.

“A default is frankly unthinkable,” she said in Japan ahead of the G7 meeting. “America should never default. It would rank as a catastrophe.”

She also said a default would “threaten the gains that we've worked so hard to make over the past few years in our pandemic recovery. And it would spark a global downturn that would set us back much further.”

Yellen added that a default would “risk undermining U.S. global economic leadership and raise questions about our ability to defend our national security interests."

During her remarks at the meeting, Yellen said that the overall global economy is currently n better shape than predicted.

"Even as we face downside risks, I believe that the global economy remains in a better place than many predicted six months ago," she said.

House Majority Leader Kevin McCarthy has been advocating for spending reductions to accompany any debt limit increase. The GOP-led House passed a bill with spending reforms that would also raise the debt limit by $1.5 trillion. 

Senate Republican Leader Mitch McConnell has said Senate Majority Leader Chuck Schumer doesn't have 60 votes for a clean debt ceiling increase without anything else included, which Biden supports.

Without 60 votes, Biden would have to reach some sort of agreement with Republicans in order to avoid default.

McConnell noted there is now divided government and "elections have consequences."

Following the meeting between congressional leaders and Biden at the White House on Tuesday, McCarthy told reporters there was "no new movement" toward a deal. The speaker also said he asked Biden to identify areas where some spending reductions could be made but he did not name any during the meeting. 

Biden described the meeting as "productive."

Congressional leaders were scheduled to meet with President Biden again on Friday. The meeting has been postponed.

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