In a letter to Congress Monday, Treasury Secretary Janet Yellen urged immediate action to increase the nation’s debt ceiling before June 1 when she estimates the U.S. government will run out of money.
“In my May 1 letter, I noted that our best estimate was that Treasury would be unable to continue to satisfy all of the government’s obligations by early June if Congress does not raise or suspend the debt limit before that time,” Yellen said in the letter Monday. “With additional information now available, I am writing to note that we still estimate that Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1.”
Yellen said the estimates are based on available data from current “federal receipts, outlays, and debt.”
“We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” she said. “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
President Joe Biden was scheduled to meet with House Speaker Kevin McCarthy Monday to discuss the issue of raising the nation’s $31.4 trillion debt limit before the deadline so that the country can borrow enough to meet its obligations, Reuters reported.
Biden expressed optimism on reaching a deal with McCarthy and the House Republican majority ahead of the talks on Sunday, according to CNBC.
According to the report, Monday’s talks between Biden and the four Congressional leaders was rescheduled from last Friday.
“I really think there’s a desire on their part, as well as ours, to reach an agreement, and I think we’ll be able to do it,” CNBC reported Biden telling reporters Sunday in Delaware. As to his state of mind, he said, “I remain optimistic because I’m a congenital optimist.”
While Biden thinks a deal can be reached on the limit, McCarthy said the two sides were still “far apart” on raising the limit.
“I still think we’re far apart,” McCarthy told NBC News on Monday outside the Capitol, adding, “It doesn’t seem to me yet that they want a deal. It seems like they want to look like they’re in a meeting. They’re not talking anything serious.”
A House Republican bill passed the chamber last month that not only raised the debt limit, but increased work requirements for welfare programs including food stamps and Medicaid.
That legislation is considered dead in the Democratic controlled Senate.
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