Janet Yellen Warns Against Government Shutdown

Federal Reserve Chair Janet Yellen on Thursday called on Congress to fund the government, warning that a government shutdown would jeopardize the country’s economic health. Yellen also cautioned against brinksmanship over raising the debt ceiling. 

“I believe it is the responsibility of Congress to pass a budget, to fund the government, to deal with the debt ceiling so that America pays its bills,” Yellen said at a press conference on the Fed’s decision to leave its benchmark interest rate unchanged. “We have a good recovery in place that is really making progress. To see Congress take actions that would endanger that progress -- I think that would be quite unfortunate.” 

Yellen insisted that fear of a government shutdown and the harm it would cause the economy had not influenced the Fed’s decision to maintain near-zero interest rates . “It played absolutely no role in our decision,” Yellen said. 

House Republicans are refusing to pass legislation  to fund the government, if it provides money to Planned Parenthood . President Barack Obama has vowed to veto any measure that doesn't include funding for the reproductive health care provider, setting up a confrontation that could shutter the federal government if a resolution is not reached before Sept. 30.

Standard & Poor’s estimated that the last GOP-led government shutdown in October 2013 cost the economy $24 billion in lost GDP. That shutdown, which lasted 16 days , was precipitated by House Republicans’ refusal to provide funding for the Affordable Care Act.