US Treasury Secretary Janet Yellen holds a press conference at the US Treasury Department in Washington, DC, on April 11, 2023.
Stephanie Reynolds | AFP | Getty Images
Treasury Secretary Janet Yellen said on Sunday that failure to raise the debt ceiling would cause a “precipitous economic downturn” in the US, and she repeated her warning that the Treasury Department could run out of money to pay off the obligations. its debt in June.
“Our current projection is that by early June, there will come a day when we won’t be able to pay our bills unless Congress raises the debt ceiling, and this is something I strongly urge Congress to do,” said Yellen said on ABC’s “This Week.”
Yellen said the US is already using “extraordinary measures” to avoid default, and it’s not something the Treasury Department can continue to do. He said, Congress needs to act to avoid “economic calamity.”
“It is widely agreed that there will be financial and economic turmoil,” Yellen said.
Lawmakers are trying to find a way to raise or suspend the debt ceiling, which would allow the US to pay its bills on time. But they are currently in an impasse, raising the possibility of default.
Yellen called for decisive action, and fast. In a letter to House Speaker Kevin McCarthy, R-Calif., Monday, Yellen said the new data on tax receipts has forced the department to increase its estimate of when “the Treasury Department will not be able to continue to meet all of its obligations government” as early as June 1. This date is earlier than expected by Wall Street economists.
On Monday, President Joe Biden called out the “big four” congressional leaders — Senate Majority Leader Chuck Schumer, DN.Y., Senate Minority Leader Mitch McConnell, R-Ky., McCarthy and House Democratic Leader Hakeem Jeffries, N.Y. — to invite them to a May 9 meeting at the White House to discuss the debt limit, a White House official told NBC.
Jeffries said on Sunday that the meeting organized by Biden was “very important” and would help the US find a way forward.
“We have to avoid default, period,” he told NBC’s “Meet the Press.”
But for Sen. James Lankford, R-Okla., said the debt ceiling meeting should have happened sooner. He said the issue was raised in the week after the November election, and that President Biden’s refusal to negotiate was “very good.”
“Everybody knew it was coming and the president refused to negotiate on it,” he told ABC’s “This Week” on Sunday.
