US to default on debt? Treasury Secretary Yellen calling CEOs personally to warn

US default

US Treasury Secretary Janet Yellen is personally contacting US corporate and financial executives to outline the “catastrophic” effects a US default on its debt would have on the US and international economy.

According to a report in a foreign news outlet, the treasury secretary is speaking with CEOs one-on-one to warn them about the “dangerous consequences of the current brinkmanship.”

According to the report, representatives of the Biden administration had discussions with business executives about putting pressure on Republicans to lift the debt ceiling without conditions.

The treasury secretary delayed a planned trip to Japan for this week’s Group of Seven (G7) finance ministers meeting to appear on a US TV show, where she warned the failure of Congress to raise the $31.4 trillion debt ceiling could trigger a “constitutional crisis.”

Talks on the issue should not take place “with a gun to the head of the American people,” Yellen said in a pointed reference to Republican lawmakers’ insistence on tying a debt-ceiling increase to sweeping spending cuts that Democrats oppose.

Yellen will hold a press conference in Niigata, Japan, on Thursday before the G7 summit. She is currently scheduled to fly to Japan this week.

President Joe Biden insists that Congress has a constitutional duty to raise the debt ceiling, which reflects previously spent federal money, without conditions.