Janet Yellen addresses debt ceiling, bank failures, and World Bank reform.
Treasury Secretary Janet Yellen has warned that prioritizing payments to cover only certain obligations would not avoid a US debt default. Yellen stressed that prioritization is effectively a default by just another name and that it would be a recipe for economic and financial catastrophe to think the US can pay some of its bills and not all of them. The GOP-led House Ways and Means Committee earlier this month passed the Default Prevention Act, which would modify Treasury’s authority when the US hits its borrowing cap to allow it to issue debt to pay principal and interest on the public debt, as well as Social Security and Medicare benefits.