Yellen describes "economic catastrophe" that will result if debt limit isn't raised

Treasury Secretary Janet Yellen warned Tuesday of a potential "economic catastrophe" if Congress and the White House fail to take action to raise the federal debt ceiling.

"In the longer term, a default would raise the cost of borrowing into perpetuity. Future investments, including public investments, would become substantially more costly," Yellen told a crowd of local government officials during an otherwise optimistic speech to a gathering of the National Association of Counties.

"Household payments on mortgages, auto loans, and credit cards would rise, and American businesses would see credit markets deteriorate," she said. "On top of that, it is unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security."