Yellen penned a new letter to US House of Representatives Speaker Kevin McCarthy to share updated information on the debt limit.
In the letter in question, Yellen stated that it is estimated that the Treasury may not be able to meet all of the government’s obligations unless Congress raises or suspends the debt limit by early June, and potentially by June 1.
Pointing out that these estimates are based on available data, Yellen noted that federal revenues, expenditures and debts may differ from these estimates.
Last minute warning about debt limit
Stating that the actual date when the Treasury has exhausted the extraordinary measures may be a few days or weeks after these estimates, Yellen said that he will provide additional information to Congress next week as more information becomes available.
“We have learned from past debt-limit conundrums that waiting until the last minute to suspend or increase the debt limit can severely damage business and consumer confidence, increase short-term borrowing costs for taxpayers, and adversely affect the U.S. credit rating,” Yellen said. made its assessment.
Stating that they have already seen the Treasury’s borrowing costs for securities due in early June rise significantly, Yellen said that if Congress fails to increase its debt limit, it will cause serious difficulties for American families, the country’s global leadership will be damaged and questions about its ability to defend national security interests. he said he will create.
Yellen reiterated her call to protect the reputation of the United States by taking action as soon as possible to Congress.
debt limit dilemma
In the US, the federal government has reached the $31.4 trillion debt limit that could lead to default.
The debt limit, or debt ceiling, means “the upper limit on the amount of money the U.S. government can borrow to pay off its debts.”
Republicans, who hold a majority in the House of Representatives, are in favor of significant spending cuts in debt-limit negotiations. Democrats insist on increasing the debt limit and reject Republican proposals to cut certain spending.
US President Joe Biden is expected to meet with Congressional leaders on Tuesday to discuss the debt limit issue.