US treasury secretary warns of debt ceiling 'catastrophe'

US Treasury Secretary Janet Yellen has warned of an emerging "financial catastrophe", once again raising the alarm about the failure of lawmakers to timely approve the raising of the government's monumental debt ceiling.

Congress's failure to act upon the debt ceiling could trigger a "constitutional crisis" that also would call into question the federal government's creditworthiness, Yellen claimed on Sunday, calling on lawmakers from both dominant political parties "to make sure that Congress does its job" and readily approves the US government's budget bill.

"It's Congress's job to do this," she underlined, reiterating: "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 [Joe] Biden and the US Treasury can take to prevent that catastrophe."

"Our priority is to make sure that Congress does its job. There is no way to protect our financial system in our economy, other in Congress doing its job and raising the debt ceiling and enabling us to pay our bills... This would be a constitutional crisis," she further underlined.

Yellen had previously stressed that it was the "basic responsibility" of Congress to increase or suspend the whopping $31.4 trillion borrowing cap set for the government without delay. 

After the January due date had expired, the US treasury chief told lawmakers in February that the government will likely run out of money in June and most likely be unable to issue payments to its employees, the military’s families, seniors and others dependent on the government.

Republican lawmakers, however, have linked an increase to the government's debt ceiling to its slashing of public spending.

Republicans pass debt-ceiling hike as US creeps toward financial calamity

The US House of Representatives on Wednesday narrowly passed a bill to raise the government

Republican House Majority Leader Steve Scalise of Louisiana insisted in a recent interview that passage of debt ceiling would require Biden and the other Democrats to change the "entire dynamic" of the process, thus putting pressure on them to better engage in negotiations with Republican lawmakers.

Republican legislators have further insist that the Biden administration must give in to negotiations on cutting spending, even as the White House and congressional Democrats demand a debt limit increase with no strings attached.

Meanwhile, June 1, 2023 is reportedly the deadline to reach a resolution.

Analysts say if the bill is further delayed, what is left of US credit and trust will be lost, and the already fragile US economy will fall into an endless abyss.

“If you did ride over this cliff and the government were to technically default, that would be a major problem. It would cause a global crisis,” Deutsche Bank US senior economist Brett Ryan said of a potential default.

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