U.S. Treasury Secretary Janet Yellen has actually cautioned that the Treasury will not have the ability to pay all of the federal government’s debt “as early as June 1, if Congress does not raise or suspend the debt limit before that time.” Yellen also warned that the U.S. defaulting on its debt commitments “would produce a financial and monetary disaster.”
U.S. Debt Default Could Happen by June 1, Says Yellen
United States Secretary of the Treasury Janet Yellen cautioned Monday that the U.S. federal government might default on its debt by June 1, which is earlier than the federal government and Wall Street had actually anticipated. In a letter to House Speaker Kevin McCarthy, Yellen composed:
After evaluating current federal tax invoices, our finest quote is that we will be not able to continue to please all of the federal government’s commitments by early June, and possibly as early as June 1, if Congress does not raise or suspend the debt limitation prior to that time.
She clarified that the Treasury Department’s quote of when it could default on the federal government’s debt commitments is “based on currently available data,” keeping in mind that “It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills.”
However, she worried that based on the present forecasts, “It is imperative that Congress act as soon as possible to increase or suspend the debt limit in a way that provides longer-term certainty that the government will continue to make its payments.”
Emphasizing that (*1*) Yellen cautioned:
If Congress stops working to increase the debt limitation, it would trigger extreme difficulty to American households, damage our worldwide management position, and raise concerns about our capability to protect our nationwide security interests.
Congressional Budget Office Similarly Estimates U.S. Debt Default Could Happen in June
The Congressional Budget Office (CBO) has also modified its quote of when the U.S. federal government could default on its debt commitments. The federal company revealed Monday:
Because tax invoices through April have actually been less than the Congressional Budget Office expected in February, we now approximate that there is a substantially higher threat that the Treasury will lack funds in early June.
On Monday, President Joe Biden called McCarthy and 3 other congressional leaders — Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, and House Democratic Leader Hakeem Jeffries — to welcome them to a conference on May 9 at the White House to talk about the debt limitation, a White House main informed NBC.
Yellen cautioned recently that the U.S. defaulting on its debt commitments “would produce an economic and financial catastrophe,” stressing that it “would raise the cost of borrowing into perpetuity” and “future investments would become substantially more costly.”
What do you consider Treasury Secretary Janet Yellen’s cautioning that the U.S. federal government could default on its debt commitments as quickly as June 1? Let us understand in the comments area below.
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