Treasury Secretary Janet Yellen told congressional leaders on Monday that the United States government is still on track to default as soon as June 1, which is consistent with previous estimates provided to lawmakers.
Congress has less than three weeks to act or risk default, which could ultimately cause the country to go into a recession. The U.S. has been using “extraordinary measures” to pay the bills after hitting the borrowing limit back in January.
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“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,” she wrote in a letter to congressional leaders.
Yellen’s update comes as President Joe Biden and top lawmakers are preparing to meet on Tuesday to continue negotiations over raising the debt ceiling. Biden and the Democrats have been at odds with Republicans over how to tackle the issue. Republicans in both chambers of Congress continue to assert they won’t pass a debt ceiling increase unless they have an agreement with the White House on budget cuts, arguing that reduced spending is needed to curb inflation. Democrats continue to refuse to attach conditions to raising the debt limit.
As the window for averting a potential default narrows by the day, lawmakers have offered conflicting reports about whether they are making progress with negotiations.
Senate Majority Leader Chuck Schumer (D-NY) told reporters that debt limit talks are ongoing and that Democrats are “working very hard to avoid default,” according to reporting from Bloomberg.
However, House Speaker Kevin McCarthy (R-CA) did not project as much optimism on Monday.
“I still think we’re far apart,” McCarthy told reporters walking into the Capitol on Monday. “It doesn’t seem to me that they want a deal.
“It seems like they want to look like they’re in a meeting,” McCarthy added.
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The Tuesday meeting between top leaders was initially scheduled for Friday but was postponed until Tuesday to give staff more time to negotiate.
On Friday, the Congressional Budget Office said there was a “significant risk” the U.S. will default on its debt “at some point in the first two weeks of June.”
