Debt ceiling: US could be in default “from June 1”.

In a letter to House Republican Speaker Kevin McCarthy and a letter made public by the Treasury Department, Ms. Yellen estimated that the debt ceiling could indeed be reached. From June 1.

Our best estimate is that we will not be able to fulfill all government obligations in early June and before June 1.Wrote a letter to the President.

That doesn’t mean default next month, but the U.S., which has so far been able to avoid shutting down services by playing on various accounting lines, will find itself in a more precarious economic situation this time around.

Specifically, the Treasury must make choices among its various expenditures, which may force it to curtail some of them, particularly health or pension benefits, in order to continue meeting its debt obligations.

We cannot predict with certainty the exact date when the Treasury will no longer be able to pay government bills, and I will continue to update Congress in the coming weeks as more information becomes available.Mrs. Yellen added.

In a statement, the Congressional Budget Service (CBO) confirmed the Treasury’s estimates, ruling that As the income reporting campaign was weaker than initially expected, we now believe there is a higher risk of the Treasury running out of funds by early June..

The U.S. Congress must vote regularly to raise the federal government’s debt ceiling, something it has done 78 times since the early 1960s, often without debate.

Raise the cap unconditionally, says Biden

But this year, Republicans, who have held a slim majority in the House since early 2022, are refusing to give what they see as a blank check in favor of the Biden administration and instead want to increase the cap. A drastic cut in federal spending.

However, in mid-January the federal government reached its ceiling of $31,000 billion, forcing the Treasury to take the first series of measures to stay at that level, above all else.

At the White House, Joe Biden has repeatedly said that raising the ceiling must be done without conditions because he believes the debt is the result of policies pursued by all administrations in the past, both bipartisan.

In a statement, Mr. The president announced that Biden called Kevin McCarthy on Monday.

Kevin McCarthy, a Republican, is the Speaker of the House of Representatives.

Photo: dpa / OLIVIER DOULIERY via Getty Images

4500 billion against 1500 billion

Last Wednesday, the House of Representatives, Mr. McCarthy voted on the proposed speech on March 31, 2024, which would have made the debt a major theme of the presidential campaign for the November elections of that year.

After three months of inaction by the Biden administration, the House has acted, with legislation to end default risk awaiting consideration by the Senate as we speak.Kevin McCarthy said in a statement on Monday. The Senate and the President need to work, and fast.

But the text is unlikely to be voted on by the Senate, which is controlled by a slim majority of Democrats.

It is time to put aside partisan interests and do what is right and necessary for the American people and avoid the first government default that will crash markets, raise costs for families and challenge their savings for retirement.Democratic leaders in Congress, Chuck Schumer (Senate) and Hakeem Jeffries (House), said in a joint statement.

The two sides must reach an agreement soon, though: The current session offers only 12 days of debate on Capitol Hill through June 1. failure Will cause economic and financial disasterMs Yellen had warned on April 25.