Biden's intel chief says China and Russia would exploit looming US debt default
The director of US national intelligence (DNI) says China and Russia would almost certainly exploit a US government debt default which, should it happen, would trigger an economic catastrophe.
DNI serves as executive head of the United States Intelligence Community (IC) and directs and oversees the National Intelligence Program (NIP).
“It would be almost a certainty” that both countries would “look to take advantage of the opportunity,” DNI Avril Haines told Senate Armed Services Committee members on Thursday.
She claimed that China and Russia could exploit such an event for propaganda purposes through “information operations,” using it as evidence that the US political system is chaotic and that the US is “not capable of functioning as a democracy.”
She said that a default would “almost certainly” create global uncertainty about the value of the US dollar, and the country’s institutions, “leading to volatility and in currency and financial markets and commodity markets that are priced in dollars.”
Last week, US Treasury Secretary Janet Yellen sounded the alarm that a failure by Congress to raise the government's debt ceiling would eventually trigger an economic catastrophe.
"A default on our debt would produce an economic and financial catastrophe," Yellen said on April 25 at the Sacramento Metropolitan Chamber of Commerce members' summit in Washington.
Yellen warned that failure by Congress to raise the government's debt ceiling and the resulting default on US debt would result in job losses and higher interest rates for years to come.
In a letter to Speaker of the House Kevin McCarthy, published on Monday, Yellen asked Congress to increase the government's debt ceiling before this date or to suspend its implementation in order to prevent economic turmoil.
After reaching the borrowing cap of $31.4 trillion on January 19, Yellen informed Congress that the Treasury would use cash receipts and extraordinary cash management measures to continue making payments on debt, federal benefits, and other expenditures at least through June 5.
The Republican-controlled House of Representatives is scheduled to vote in the coming weeks on raising the US government's debt ceiling by $1.5 trillion.
However, McCarthy suggested last week that the Republican plan would be to link their approval of an increase of $1.5 trillion to a decrease of $4.5 trillion in public spending.
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