Six former Treasury secretaries urge Congress to ‘move swiftly’ on debt ceiling

Six former Treasury secretaries on Wednesday urged Congress to take quick action to raise or suspend the U.S. debt ceiling or else risk “serious economic and national security harm.”

The warning from some of the nation’s top economists joins a growing chorus of public- and private-sector voices that say failure to address the borrowing limit could push the fragile American economy into another economic downturn.

The Treasury Department estimates that they will likely have enough cash on hand to pay for the government’s bills through some point in October, but have yet to offer a specific “drop-dead” date.

Former Treasury secretaries Henry Paulson, Timothy Geithner, Larry Summers, Jack Lew, Robert Rubin and Michael Blumenthal told House Speaker Nancy Pelosi, D-Calif., that even flirting with a first-ever U.S. default could spook markets.

“As former Treasury secretaries, we write to express our deep sense of urgency that Congressional leadership, working with the Administration and the President, move swiftly to initiate and complete a viable legislative process necessary to raise the debt limit,” they wrote.

“Even a short-lived default could threaten economic growth,” the group added. “It creates the risk of roiling markets, and of sapping economic confidence, and it would prevent Americans from receiving vital services. It would be very damaging to undermine trust in the full faith and credit of the United States, and this damage would be hard to repair.”

Though the prior secretaries addressed the House speaker, they sent copies to House GOP leader Kevin McCarthy, R-Calif., Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, Republican of Kentucky.

Former Treasury Secretary Steven Mnuchin, who served under former President Donald Trump and did not sign the letter, did not immediately respond to CNBC’s request for comment. The Treasury Department declined to offer comment on the secretaries’ letter.

Article source: https://www.cnbc.com/2021/09/22/debt-ceiling-six-former-treasury-secretaries-urge-congress-to-move-swiftly.html