US will run out of money by JUNE 1 if Congress doesn’t raise or suspend debt limit: Treasury Secretary Janet Yellen’s dire warning that there could be catastrophic bankruptcy within a MONTH if Biden and McCarthy don’t strike a deal
- Speaker Kevin McCarthy and President Biden are still deadlocked on how to proceed with raising the country’s $31.4 trillion borrowing limit
- The pair have not met to discuss a plan in three months
The Treasury Department now believes the country could default in as little as a month from Monday, according to a new letter from Sec. Janet Yellen wrote to Congress.
“In my January 13 letter, I noted that cash and extraordinary measures were unlikely to be exhausted before early June. After looking at recent federal tax revenues, our best guess is that we won’t be able to meet all government obligations by early June, and possibly as early as June 1,” Yellen wrote.
Speaker Kevin McCarthy and President Biden are still deadlocked over how to proceed with raising the country’s $31.4 trillion borrowing limit, and have not met to discuss the issue in three months.
Republicans insist they will not allow the debt ceiling to be raised without spending cuts, and Democrats insist that the debt ceiling should not be used as leverage and they will only agree to a clean increase.
Any agreement on how to proceed must first be worked out between the speaker and the president. The GOP-led House and Democrat-led Senate should get on board and pass it on and send it to the president’s office, all within a month.
After reviewing recent federal tax receipts, our best guess is that we will not be able to meet all of the government’s obligations in early June, and possibly as early as June 1,” Treasury Sec Janet Yellen wrote.
Meanwhile, between now and June 1, the House is in session for just 12 days.
“Given current projections, it is imperative that Congress act as quickly as possible to raise or suspend the debt limit in a manner that provides longer-term assurance that the government will continue to make its payments,” Yellen said. She stressed that the exact date when the government will run out of money for its payments is imprecise due to the variability of federal tax receipts.
Last week, the House passed sweeping debt-ceiling legislation that Senate Democrats insisted is dead upon arrival in their chambers.
Republicans have said their plan would save $4.5 trillion in exchange for a $1.5 trillion increase in the country’s credit limit. Now the GOP leadership insists the ball is in Biden’s court to come to the negotiating table.
Now, some House Democrats have even said publicly that it’s time for Biden to come to the negotiating table.
But after the political wrangling it took for McCarthy to get his conference on board with a party-line bill, the question looms as to how he would get his party organization on board with a less conservative bill.
Asked how he could then get his caucus to agree to a debt ceiling bill that could actually be passed by the Democrat-led Senate last week, the speaker objected.
“With the president still not negotiating, I’m confident that one party put the debt ceiling in place. We raised the debt ceiling so no one has to worry about whether the debt ceiling will be lifted,” the speaker said. ‘We did. The Democrats don’t. The president wants to ensure that the debt ceiling is lifted, sign this bill.”
“Other bills we’ve passed say you’re going to veto, at the end of the day you’re probably going to sign this one too,” McCarthy said in words directed to Biden.
Last week, Biden said he would only meet McCarthy if he didn’t use the debt limit as leverage.
“Happy to meet McCarthy,” Biden said. “But not about whether or not to extend the debt limit. That is not negotiable.’