Treasury Secretary Janet L. Yellen told senators on Thursday that the banking system remains sound in the aftermath of Silicon Valley Bank’s collapse. But she warned that failure to raise the debt limit in time would be devastating for banks after the turmoil.
The country’s fiscal and economic health took center stage at the Senate Finance Committee’s hearing with Yellen on President Joe Biden’s fiscal 2024 budget request, as senators pressed her over concerns about avoiding a debt ceiling breach, ensuring stability of the banking system, combating inflation and shoring up Social Security’s finances.
In a new refrain on the debt limit fight, Democrats and Yellen tied the failure of Santa Clara, Calif.-based Silicon Valley Bank, and the subsequent collapse of New York-based Signature Bank, to the need to raise the limit before the government can’t pay its bills in full. Experts’ estimates for when that would happen range from June to mid-August.
