Yellen writes to warn McCarthy there could be no funds to run government in 10 DAYS

Treasury Secretary Janet Yellen warned House Speaker Kevin McCarthy that the nation would soon be unable to meet its debts — as McCarthy said the White House needed to reach an agreement this week to pass a deal on time. to get.

Yellen wrote to McCarthy on Monday that the Treasury’s “ability to continue funding the federal government’s operations” has exceeded the legal debt limit and exhausted extraordinary measures.

She updated her latest estimate and said that “with another week’s worth of information available I am writing to note that we estimate it is very likely that the Treasury will no longer be able to meet all of the government’s obligations if Congress fails to do so. taken to raise or suspend the debt limit in early June, and possibly as early as June 1.”

She applied pressure hours before McCarthy sits down with President Joe Biden, following a negotiation breakdown during Biden’s trip to Japan. The two men agreed to meet Monday over a phone call as Biden flew home on Air Force One.

“We can make a deal tonight, we can make a deal tomorrow, but you have to get something done this week to get it through and move it to the Senate,” McCarthy told reporters at the Capitol.

He was referring to a commitment he made to full members during his struggles to get elected speaker to give members three days to review the legislation.

That was in response to longtime leaders making deals and taking them to the floor before members had a chance to weigh in on the details.

Treasury Secretary Janet Yellen warned that it is “highly likely that the Treasury will no longer be able to meet all of the government’s obligations” if Congress does not take action by June 1 to lift or suspend the debt limit .

President Joe Biden went after MAGA Republicans in Japan. He agreed to negotiate the budget directly with McCarthy

He also noted that it takes time for the staff to put an agreement in writing, and some time for the Senate to act — though the chamber has been known to rush through legislation when faced with a deadline under high pressure.

“We have the teams back together, back to work. You know, time is of the essence,” he continued in response to questions at the Capitol CNN. ‘Time is crucial. We still have 10 days to go.’

McCarthy also indicated that the final vote could be bipartisan — amid speculation, conservative Republicans could be hesitant to even challenge his speakership if he goes too far in Biden’s direction.

“I firmly believe that whatever we’re negotiating now, a majority of Republicans will see that this is the right place to put us on the right track,” he said.

The GOP House majority is only 222-213, while the Democrats have a 51-49 majority in the Senate.

At the Capitol, White House aides Shalanda Young, Louisa Terrell and Steve Ricchetti have met with GOP Representatives Garret Graves and Patrick McHenry to try and reach the broad outlines of a deal. Talks continued Sunday night, with no sign that the two sides had agreed on the cuts demanded by Republicans.

In her letter, Yellen spoke about the costs of debt reduction.

“We have learned from previous debt limit deadlocks that waiting until the last minute to suspend or raise the debt limit can seriously damage business and consumer confidence, increase short-term borrowing costs for taxpayers, and negatively impact on the creditworthiness of the United States. States. In fact, we’ve already seen Treasury borrowing costs rise significantly for securities maturing in early June. A failure by Congress to raise the debt limit would cause serious problems for American families, damage our global leadership position and raise questions about our ability to defend our national security interests,” she wrote.