Treasury Secretary Janet L. Yellen reiterated on Monday that the U.S. could run out of money to pay the bills by June 1 unless Congress raises or suspends the debt ceiling, citing President Biden and Congress. The pressure on leaders will increase. Reach consensus to avoid default.
The forecast came a day before Biden was scheduled to meet with Kevin McCarthy and other leading lawmakers at the White House after staff-level negotiations over the weekend. The Treasury Department has previously warned that the so-called X-date could arrive as early as June 1, at which point the federal government could default on its debts.
In a letter to lawmakers, Yellen warned that the actual date for the depletion of federal funds “may be days or weeks later than these projections.” He called on Congress to act quickly to prevent defaults.
“We believe that past debt limit deadlocks mean that waiting until the last minute to suspend or raise debt limits will seriously damage business and consumer confidence, raise short-term borrowing costs for taxpayers, We learned that it could have a negative impact on the credit rating of the U.S. nation,” Yellen said.
The Treasury Department has used an accounting maneuver known as an unusual move to keep paying the nation’s bills without breaking the $31.4 trillion debt ceiling officially reached on Jan. 19. rice field.
Yellen did not disclose additional steps she plans to save money. Budget experts say quarterly tax revenue inflows could provide additional headroom through the second half of the summer if the government can find enough coffers to pay the bills by mid-June. Expect.
Yellen’s letter is the latest warning about the government’s precarious financial situation. On Friday, the Congressional Budget Office warned that federal cash could be depleted within the first two weeks of June, at which point the U.S. would be unable to pay its February bill in full. risk,” he said. within a few weeks.
The bipartisan Budget Office predicted that a default would lead to “credit market distress, disruption of economic activity and a rapid rise in Treasury borrowing rates.”
Whether the two countries can reach an agreement in time to prevent default remains an open question. Biden expressed optimism on Sunday that a deal could be reached, while McCarthy said on Monday that the two sides were still a long way off.
Time is running out. Biden is scheduled to leave for Japan on Wednesday to attend the G7 summit, and lawmakers are expected to adjourn ahead of Memorial Day weekend.
