Failure to raise U.S. debt ceiling would lead to 'economic and financial catastrophe,' Yellen says

The U.S. government risks "economic and financial catastrophe" if the House fails to pass a bill to raise the $31.4 trillion debt ceiling, Treasury Secretary Janet Yellen said Monday.

The nation hit the statutory limit last month, but Republican members of Congress are holding out on raising it to negotiate changes in federal spending rules with the White House before drafting a bill. The Treasury Department under Yellen has taken several temporary measures to help the government avoid default.

"America has paid all of its bills on time since 1789, and not to do so would produce an economic and financial catastrophe," Yellen told ABC's George Stephanopolous on Monday. "And every responsible member of Congress must agree to raise the debt ceiling."

The Treasury Secretary said the House has always fulfilled its duty to raise the limit though it has sometimes "gone up to the wire."

House Speaker Kevin McCarthy announced that he will deliver an address on the debt ceiling Monday at 5:30 p.m. ET. Talks between McCarthy and President Joe Biden have continued amicably, but an agreement has not been reached.

During the interview, Yellen also praised the better-than-expected January job numbers and steadily decreasing inflation, both issues she said Biden will address in his State of the Union speech Tuesday.

"Last month, we created over 500,000 jobs, more than 12 million since the president took office, and inflation is coming down," she said. "It remains too high, but it's been falling for the last six months."