In her second message to Congress in two weeks, she added that the debt ceiling could become binding by June 1.
The new date reflects more revenue and payment data since Yellen told lawmakers in a May 1 letter that the department could run out of money to pay government bills as early as June, possibly as early as June.
Yellen has repeatedly warned that Congress’ failure to raise the federal debt ceiling by $31.4 trillion could lead to a “constitutional crisis” and trigger “economic and financial catastrophe” for the United States and global economies.
The Congressional Budget Office said last week that the United States faces “significant risk” of defaulting on its obligations in the first two weeks of June without raising the debt ceiling.
A short term solution
However, analysts noted that the department could last through August without default if it could collect quarterly tax revenue on June 15 and access the new borrowing measures that would become available on June 30.
In today’s letter, she urged Yellen to act as soon as possible.
“We have learned from the previous impasse over the debt ceiling that waiting until the last minute to suspend or raise the debt ceiling can seriously damage business and consumer confidence, increase borrowing costs at short term for taxpayers and negatively affect the credit rating of the United States,” she said.
“If Congress fails to raise the debt ceiling, it will cause great suffering for American families, hurt our position as a global leader, and raise questions about our ability to pursue our national security interests,” he said. -she adds.
Yellen’s second message to Congress came on the eve of an expected meeting between US President Joe Biden and House Speaker Kevin McCarthy for discussions on the debt ceiling.
Biden travels to Japan on Wednesday to attend the G7 summit, then to Australia, a trip that lasts about a week.
McCarthy said Monday there had been no progress in the marathon conversations among administration and congressional staff all weekend.
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