By David Lawder

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen issued a fresh plea for Congress to raise the federal debt ceiling on Sunday, arguing a default on U.S. debt would trigger a historic financial crisis.

In a Wall Street Journal opinion piece https://www.wsj.com/articles/congress-raise-debt-limit-ceiling-yellen-treasury-brinkmanship-federal-budget-11632069056, Yellen said that the crisis triggered by a default would compound the damage from the continuing coronavirus pandemic, roiling markets and plunging the U.S. economy back into recession at the cost of millions of jobs and a lasting hike in interest rates.

Yellen stated that the U.S. creditworthiness is a strategic asset and would make us a permanent weaker country after this crisis.

Yellen didn’t give a timeline, but she described the economic impact on consumers by higher borrowing costs.

She previously stated that defaults could occur in October, when Treasury’s cash reserves are exhausted and its extraordinary borrowing capacity is below the $28.4 trillion debt limit.

We can borrow less than most other countries, so defaulting could jeopardize our enviable fiscal situation. It could also lead to America becoming more costly as consumers will be paying higher interest rates. “Mortgage payments, car loans, credit card bills—everything that is purchased with credit would be costlier after default.”

Republicans oppose raising or suspending $28.4B. U.S. The U.S.

Yellen argued that the debt limit is about paying past spending obligations. He also said that waiting too long for the debt ceiling to be lifted can cause more damage. He cited a 2011 crisis with the debt ceiling that pushed Congress to default, which led to a downgrade of its credit rating.

The financial disruptions in the market lasted months. Here, time is money. This could potentially amount to billions of dollars. We cannot tolerate delay or default.

Jim Clyburn, House Majority Whip, stated Sunday that Democrats could have to adopt the debt ceiling rise without Republican support.

“I think we ought to do what’s necessary and message to the American people exactly who is trying to destroy this great democracy that we hope to keep in place,” he told CNN.