Director of National Intelligence Avril Haynes said on Thursday that China and Russia are likely to use the default on US debt to portray America as a passive, chaotic and unstable country.
Haines testified to lawmakers at the Senate Armed Services Committee on Global Threats hearing that domestic debt defaults create global uncertainty about the value of the US dollar and are likely to lead to volatility in currencies and financial markets.
“I think, in general, that Russia and China will try to identify (describe) events that show chaos in the United States through intelligence operations. Intelligence agency about the possible impact of US default on debt Asked about his assessment, he said.
“This will almost certainly create global uncertainty about the value of the US dollar and US institutions and leadership, leading to volatility in the dollar’s price in currency and financial markets and commodity markets,” Haynes said.
Asked whether China is trying to cash in on defaults on US debt through misinformation efforts, she said, “There is no information that they are planning, but our analysts will agree with you that it will.” ” It is almost certain that they will try to take advantage of the opportunity.”
Treasury Secretary Janet Yellen said earlier this week that if Congress did not raise the debt ceiling, it would “impose severe hardship on American families, damage our global leadership position and undermine our ability to protect our national security interests.” ability will be questioned.” This,” he warned.
In a letter to Congress on Monday, she wrote, the earliest the deadline to extend the debt ceiling or face the first US default could be June 1.
Yellen previously said the deadline was June 5, but it is common for the Treasury to adjust the date the funds end based on fluctuating tax collections, which can be difficult to predict.
President Joe Biden will meet with congressional leaders on Tuesday, including Republican Senate Majority Leader Mitch McConnell, Republican House Speaker Kevin McCarthy, New York Senate Majority Leader Chuck Schumer and House Minority Leader Hakim Jeffries. D-NY – I’m trying to arrive at a solution to avoid defaults. However, there are no signs of an imminent resolution yet.
House Republicans are pushing to link the spending cuts to an increase in the debt ceiling, while Democrats have refused to negotiate whether to pay the country’s bills or default. Democrats opposing the policy terms called for an increase in the “clean” debt ceiling. They want Congress to negotiate the Republican-sought spending cuts in a separate government funding process with a Sept. 30 deadline.
At next week’s meeting, Biden plans to “emphasize” to congressional leaders that they must “take action to avoid an unconditional default,” a White House official previously told NBC News.