U.S. Treasury Secretary Janet Yellen holds a press conference on the US Treasury Department in Washington, DC, on April 11, 2023.
Stefani Reynolds | AFP | Getty Images
Treasury Secretary Janet Yellen on Sunday said that failure to boost the debt ceiling will cause a “steep economic downturn” within the U.S., and she or he reiterated her warning that the Treasury Department may run out of measures to pay its debt obligations by June.
“Our current projection is that in early June, a day will come once we’re unable to pay our bills unless Congress raises the debt ceiling, and it’s something I strongly urge Congress to do,” Yellen told ABC’s “This Week.”
Yellen said the U.S. has already been using “extraordinary measures” to avoid default, and it isn’t something the Treasury Department can proceed to do. She said Congress must take motion to avoid “economic calamity.”
“It’s widely agreed that financial and economic chaos will ensue,” Yellen said.
Lawmakers have been trying to search out a path forward to boost or suspend the debt ceiling, which might enable the U.S. to pay its bills on time. But they’re currently at an impasse, raising the prospect of default.
Yellen has called for decisive motion, and quickly. In a letter to House Speaker Kevin McCarthy, R-Calif., Monday, Yellen said latest data on tax receipts forced the department to maneuver up its estimate of when the Treasury Department “will likely be unable to proceed to satisfy all of the federal government’s obligations” to potentially as early as June 1. This date is sooner than Wall Street economists were expecting.
On Monday, President Joe Biden called the “big 4” congressional leaders — Senate Majority Leader Chuck Schumer, D-N.Y., Senate Minority Leader Mitch McConnell, R-Ky., McCarthy and House Democratic Leader Hakeem Jeffries, N.Y. — to ask them to a May 9 meeting on the White House to debate the debt limit, a White House official told NBC.
Jeffries said Sunday that the meeting Biden has organized is “very vital” and can help the U.S. discover a way forward.
“We’ve to avoid default, period,” he told NBC’s “Meet the Press.”
But for Sen. James Lankford, R-Okla., the meeting concerning the debt ceiling must have happened much sooner. He said the problem was raised the week after the election in November, and that President Biden’s refusal to barter has been “stunning.”
“Everyone knew this was coming and the president’s refused to have the option to barter about it,” he told ABC’s “This Week” on Sunday.
