Treasury Secretary Janet Yellen emphasized on Sunday that not raising the debt ceiling could result in a severe economic decline in the United States. She also reiterated her previous warning that the Treasury Department might exhaust its options to fulfill its debt obligations by June.
Yellen informed in an ABC's "This Week" that the Treasury Department's current projection indicates that a day in early June will arrive when the US will be unable to pay its bills unless Congress raises the debt ceiling. She strongly encouraged Congress to take this necessary action.
According to Yellen, the Treasury Department has already implemented extraordinary measures to prevent a default, but these efforts cannot be sustained indefinitely. It is crucial for Congress to act promptly to avert an economic disaster.
Yellen explained that financial and economic chaos is the widely expected outcome if the debt ceiling is not addressed. Legislators have been working to find a solution to raise or suspend the debt ceiling, which would allow the US to continue paying its bills on time. However, they currently face a deadlock, increasing the risk of default.
Yellen has urged lawmakers to act decisively and swiftly. In a recent letter to House Speaker Kevin McCarthy, she revealed that new tax receipt data prompted the department to adjust its prediction of when the Treasury Department might be unable to meet all the government's obligations. The new potential date is as early as June 1, sooner than what Wall Street economists had anticipated.
On Monday, President Joe Biden invited the "big four" congressional leaders – Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, McCarthy, and House Democratic Leader Hakeem Jeffries – to a May 9 White House meeting to discuss the debt limit.
Jeffries stated on Sunday that the meeting organized by Biden is crucial for helping the US find a solution. Speaking on NBC's "Meet the Press," he emphasized that default must be avoided at all costs.
However, Senator James Lankford criticized the timing of the meeting, arguing that it should have taken place much earlier. He pointed out that the debt ceiling issue was raised shortly after the election in November and expressed his surprise at President Biden's reluctance to negotiate on the matter.
