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The U.S. Treasury Department reiterated Monday that it expects to be able to pay U.S. government bills only through June 1 without an increase in the debt limit.
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In her second letter to Congress in two weeks, Treasury Secretary Janet Yellen stated, “After reviewing recent federal tax receipts, our best estimate is that we will not be able to continue to meet all the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before then”.
Following the announcement, pressure is mounting on Congressional Republicans and the White House to reach an agreement in the coming days. The disagreement could trigger the first default in U.S. history.
The announcement comes a day before U.S. President Joe Biden meets with House Speaker Kevin McCarthy for talks, and ahead of a foreign trip by the president that begins Wednesday.
Treasury Secretary Janet Yellen warns the U.S. could default on debt as early as June 1
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May 15, 2023
The actual date when the Treasury exhausts extraordinary measures could be several days or weeks after these estimates, Yellen said in today’s letter, a change from the May 1 letter that warned only of “several weeks later.”
Biden travels to Japan on Wednesday to attend a summit of Group of Seven leaders, and then to Australia, a trip that will last about a week. McCarthy said Monday that there had been no progress in the marathon talks at the officials’ level throughout the weekend.
Yellen has repeatedly warned that failure by Congress to raise the $31.4 trillion federal debt limit could trigger a “constitutional crisis” and unleash a “financial and economic catastrophe” for the U.S. and global economies.
