Treasury Secretary Says Nation Could Face Debt Default in Less Than Three Weeks
Treasury Secretary Janet Yellen warned congressional leadership on Monday that the federal government could face a debt default in less than three weeks if an agreement on the debt ceiling is not quickly reached with President Joe Biden.
The debt ceiling, a policy that prevents the federal government from spending beyond a predetermined national debt limit of $31.4 trillion, surpassed the threshold earlier this year. Yellen said in her letter to lawmakers that the Treasury Department expects to default on obligations as early as June 1 unless the debt limit is either suspended or increased.
“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 wrote. “In fact, we have already seen Treasury’s borrowing costs increase substantially for securities maturing in early June.”
Yellen added that the exact date of the debt default is “impossible to predict,” although the June 1 estimate is based on federal receipt, outlay, and debt data.
“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,” she continued. “I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible.” (Read more from “Treasury Secretary Says Nation Could Face Debt Default in Less Than Three Weeks” HERE)
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