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Elizabeth Warren's message to Republican lawmakers
01:15 - Source: CNN
CNN  — 

Ahead of a highly anticipated meeting between President Joe Biden and Congressional leaders on Tuesday, senior Treasury officials reiterated dire warnings of economic “chaos” and “catastrophe” if the US doesn’t raise the debt ceiling as the country barrels toward default in early June.

“I know he wants to set up a process in which spending priorities and levels are discussed and negotiated but these negotiations should not take place with a gun, really, to the head of the American people,” US Treasury Secretary Janet Yellen said Sunday on ‘ABC This Week.’

While congressional Republicans want to tie any debt ceiling hike to spending and budget cuts, the administration has said the two issues are separate.

Yellen and her No. 2, Deputy Treasury Secretary Wally Adeyemo, both painted a stark picture of “economic chaos” if the debt ceiling isn’t lifted and confirmed that the latest Treasury data still indicates the US could default as soon as June 1st.

“If we were to default on our debt it would have a terrible impact on interest rates, and interest rates are the key thing to everybody to buy a home, to buy a car, for companies to invest,” Adeyemo said Sunday on MSNBC, warning that the current climate of uncertainty is already having an impact on the economy as businesses plan for potential catastrophe instead of future investments.

“We’re already going to start seeing the impacts on the economy of the fact that Congress hasn’t taken this off the table,” Adeyemo said.

White House economists and independent analysts have warned that the current brinksmanship and a potential future default could have a ruinous impact on the US economy, plunging the stock market and wiping out millions of jobs.

“If they fail to do it, we will have an economic and financial catastrophe that will be of our own making and there is no action that President Biden and the US treasury can take to prevent that catastrophe,” Yellen said, adding when pressed by ABC that there are “no good options” to take if Congress doesn’t act.