Treasury Secretary Janet L. Yellen reiterated on Monday that the U.S. may not be able to pay its bills as early as June 1, and the announcement comes as the White House negotiates an increase in the country’s debt ceiling. It served to maintain pressure on congressional leaders.
of Warning to Congress The incident comes as President Biden and House Speaker Kevin McCarthy are scheduled to meet at the White House on Monday afternoon to resolve the deadlock. Lawmakers Biden and McCarthy have spent the past week negotiating a plan to cap federal spending and cut the budget deficit while raising the $31.4 trillion borrowing limit.
Yellen warned that the state’s finances remain precarious.
“With another week of information available, the Treasury Department may no longer be able to meet all of its government obligations unless Congress moves to raise or suspend the debt limit in time. I am writing this letter to inform you that we are estimating it to be high.”Early June, possibly as early as June 1,” Yellen wrote.
In her last letter, issued a week ago, Yellen warned that unpredictable government tax revenues could push her estimates off. He said the actual date for exhausting the so-called extraordinary measures the Treasury is taking to delay defaults “could be days or weeks away.”
Yellen did not suggest there was still time on Monday, warning of dire consequences for the economy if the debt ceiling is not lifted.
“The failure of Congress to raise the debt ceiling would cause serious hardship for American families, undermine America’s position as global leader, and call into question our ability to defend our national security interests,” Yellen said. Let’s go,” he said.
The country’s cash balance is dangerously low. Yellen dismissed hopes on Sunday that the so-called unusual measures she has used to delay defaults would be enough to keep the government running normally beyond mid-June.
Republicans have refused to raise the debt ceiling without spending cuts, bringing Democrats to the negotiating table to avoid a default that could trigger a recession or financial crisis. On key issues such as federal spending caps, new labor requirements for some recipients of federal anti-poverty assistance, and funding to help the Internal Revenue Service crack down on tax evasion by high-income earners and businesses, The gap is still wide.
The Treasury Secretary said over the weekend that the government would face difficult choices about how to meet the country’s fiscal obligations if the debt ceiling is not raised. Benefit payments to retirees and veterans are likely to be interrupted, and the uncertainty could cause interest rates to spike and stock prices to fall.
The Biden administration has downplayed the notion that by invoking the 14th Amendment, which makes U.S. debt unjustified, it can effectively ignore the debt limit and continue borrowing. Administration lawyers are weighing the plan, but officials believe the expected legal challenges and uncertainty will destabilize markets.
“If the debt ceiling isn’t raised, there can be no acceptable outcome,” Yellen said on NBC’s “Meet the Press.”
