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US Treasury Sec. Warn: “Social Security, child tax credit, troop’s payments would be in jeopardy”

Newsman: In the United States, when the inflation is at a level today that not seen in 40 years, the U.S. Treasury Secretary Janet Yellen on Wednesday warned of disruptions to the global flow of food and energy.

“Russia’s actions represent an unacceptable affront to the rules-based, global order, and will have enormous economic repercussions in Ukraine and beyond,” Yellen said during her testimony before the House Financial Services Committee.

Treasury Secreatry  Yellen was cautious in response to lawmakers’ questions about a potential conflict between China and Taiwan and what a US response to that might look like.

“Certainly we are concerned about Taiwan and we will act appropriately,” she said.

Treasury Secretary Janet Yellen on Wednesday urged Congress to act quickly to raise or suspend the debt limit..

In a letter to Congressional leaders, Yellen wrote that based on the administration’s best information, cash and extraordinary measures would be exhausted in October. 

“A delay that calls into question the federal government’s ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets,” Yellen wrote. “At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk.”

Meanwhile, In an interview by ABC’s “This Week” anchor George Stephanopouloson Wednesday, US Treasury Secretary said “if the debt ceiling is not raised in December “this would be a self-manufactured crisis that affects our recovery coming out of the pandemic and would be a self-inflicted wound. We shouldn’t ever be in that position.”

Yellen further said failure to appropriate action will results, “Fifty million Americans wouldn’t receive Social Security payments. Our troops won’t know when or if they would be paid. The 30 million families that receive a child tax credit, those payments would be in jeopardy.”

While the Senate reached a deal on Thursday for an emergency hike of the debt ceiling by $480 billion to pay the nation’s bills through Dec. 3, McConnell has warned of a battle brewing over raising it further.

Sen. Minority Leader Mitch McConnell and Republicans are playing with “catastrophe” over a pending fight to raise the debt ceiling.

She said George Stephanopouloson; such a scenario “could result in catastrophe.”

While pressed by George Stephanopoulos about what would happen if McConnell keeps his word that Republicans won’t help the Democrats next time, Yellen painted a picture with drastic consequences.

On Wednesday, before the House Financial Services Committee testimony  Secretary Yellen repeatedly said the Biden administration imposed new sanctions on Russian banking institutions — Sberbank and Alfa Bank — as well as individuals, including President Vladimir Putin’s adult daughters. These new sanctions followed horrific images of carnage and possible war crimes in the Ukrainian city of Bucha.

 “ – But the fact that America’s European partners remain heavily reliant on Russian energy exports limits what the West can do. The United States intends to inflict the maximum sanctions pain possible against Russia while taking care not to inflict undue pain on its allies” she said.
“The issue with blocking oil exports from Russia is that many countries, especially in Europe, are very dependent on that oil,” she said. “And we’re likely going to see skyrocketing prices if we did put a complete ban on oil.”

“Globally, spillovers from the crisis are heightening economic vulnerabilities in many countries that are already facing higher debt burdens and limited policy options as they recover from Covid-19,” Yellen said.

Energy prices have been driven higher by concerns about supply from Russia, the number one exporter of crude oil in the world.

“We are witnessing the vulnerability that comes from relying on one fuel source or one trade partner,” Yellen said, which is why it is imperative to diversify energy sources and suppliers.”

But it’s not just about energy. Together, Russia and Ukraine account for nearly one-third of the world’s wheat exports.

“Russia’s invasion disrupted the flow of food for millions of people around the world and caused prices to spike,” the Treasury Secretary said.

Yellen said Treasury will press multilateral development banks to speed up food aid to “vulnerable” countries.

In a letter to Biden on Friday, McConnell took credit on behalf of Republicans who “filled the leadership vacuum” and helped dodge financial calamity by voting to remove the Republican filibuster stalling the temporary debt ceiling measure. He warned that come December, he would be willing to allow the nation to default on its national debt rather than work with Democrats on a resolution.

Before reaching the short-term deal to end a debt ceiling standoff and avert a U.S. default for the first time, some senators and other proponents refloated the idea of allowing the Department of Treasury to mint a platinum coin of any value without congressional approval to ensure the nation’s bills are paid. Under the 2001 law, the coin must be made of platinum because of Congress’ control over gold, silver, nickel, bronze and copper.

With George Stephanopoulos asked  Secretary Janet Yellen why she would not consider minting a trillion-dollar coin?She scoffed at the idea -“I think it’s a gimmick. And it jeopardizes the independence of the Federal Reserve,” Yellen responded. “[The deficit] has been raised almost 70 times since 1965, almost always on a bipartisan basis … I believe it should be a shared responsibility, not the responsibility of any one party.”

“Is invoking the 14th on the table if Congress doesn’t act?” Stephanopoulos asked the secretary. Saying the “text is pretty clear,” Stephanopoulos read the section of the amendment which states, “The validity of the public debt of the United States… should not be questioned.”

Yellen said, “I don’t think any president has had to do that … can’t imagine being there on Dec. 3.”

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