US Deputy Treasury Secretary Wally Adeyemo said on Friday that the US government lacks the ability to “control” payments if the debt ceiling isn’t raised, adding that invoking the 14th constitutional amendment to issue more debt it will not solve government challenges.
Speaking on CNN as the White House and congressional Republicans move closer to a deal that will limit spending and raise the debt ceiling, Adeyemo said: ‘I have no confidence that we have the ability to do some sort of prioritization so that all seniors, all veterans, all Americans get paid.”
A US official told Reuters on Friday that the White House and congressional Republicans are finalizing a deal that would raise the government’s debt ceiling to $31.4 trillion for two years, while limiting discretionary spending on everything except the military and veterans.
“We’re making progress. And our goal is to secure a deal because default is unacceptable,” Adeyemo said, adding that Biden was trying to keep policies in place to protect the most vulnerable Americans.
After warnings of possible US downgrades from credit rating agencies, Adeyemo said he hoped that didn’t happen, but the debt ceiling stall was already driving up the cost of US debt.
He told MSNBC that a default would crash the stock market and drive up the cost of borrowing, saying a recent bond auction cost the government an extra $80 million in interest payments.
He said government systems are not set up to allow deferred payments.
“We don’t have a plan B that will allow us to fulfill our commitments to our creditors, our seniors, our veterans, the American people,” Adeyemo told CNN. “The only plan we have is the one that has worked for over 200 years in this country, which is for the United States of America to pay all its bills and pay them on time.”
Source: Terra
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