Yellen urges US Congress to raise debt limit

"In recent years Congress has addressed the debt limit through regular order, with broad bipartisan support. In fact, during the last administration, Democrats and Republicans came together to do their duty three times," Yellen said in a statement on Monday. 

"Congress should do so again now by increasing or suspending the debt limit on a bipartisan basis. 

"The vast majority of the debt subject to the debt limit was accrued prior to the Administration taking office," she added. 

Yellen's statement came after the Treasury Department last week began using "extraordinary measures" to prevent the US from defaulting as the two-year deal to suspend the debt limit had expired, reports Xinhua news agency. 

As part of a bipartisan budget deal enacted in August 2019, Congress suspended the debt limit through July 31, 2021. 

On August 1, the debt limit was reinstated at a level covering all borrowing that occurred during the suspension, which had risen to $28.5 trillion as of the end of June. 

If Democrats want to pass legislation to raise or suspend the debt limit through regular order, they will need the support of 10 Republican Senators to avoid a filibuster in the upper chamber. 

But Senate Republican Leader Mitch McConnell has said that no Republicans will vote to increase the debt limit. 

"This is a shared responsibility, and I urge Congress to come together on a bipartisan basis as it has in the past to protect the full faith and credit of the US," Yellen said. 

"Failure to meet those obligations would cause irreparable harm to the US economy and the livelihoods of all Americans." 

The Congressional Budget Office warned recently that the US is at risk of a default in October or November unless the Congress raises or suspends the debt limit. 

The debt limit, commonly called the debt ceiling, is the total amount of money that the U.S. government is authorised to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.