Treasury Secretary Yellen: “Highly Likely” U.S. To Run Out of Cash by June

White House Says 8 Million Jobs Will Be Lost if US Defaults on its Debt
Source: Britannica

U.S. Treasury Secretary Janet L. Yellen is once again warning Congress of the looming US default. According to her, it is now “highly likely,” that the US will run out of cash by June, stopping it from paying its debt.

President Biden and Speaker McCarthy are currently locked horns over the looming debt crisis, looking to resolve the current impasse. Representatives from both sides have been drafting ideas over the past week to cap federal spending while reducing the deficit. At the same time, both hope to raise the $31.4 trillion borrowing cap.

In her letter, Secretary Yellen warns:

“With an additional week of information now available, I am writing to note that we estimate that it is highly likely that Treasury will 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,” Ms. Yellen wrote.

Secretary Yellen letter to congress.

Treasury Secretary Yellen previously sent a letter to Congress last week, giving an idea of a potential date for this crisis to take effect. However on Monday, Ms. Yellen did not suggest that there might be more time, and she warned that failing to lift the debt limit would be disastrous for the economy. She gave June 1 as an absolute date that the US could run out of cash.

“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,” Ms. Yellen adds. Hope to solve this issue before June 1 is dwindling more each day, and Democrats and Republicans are still miles apart on multiple issues.

Treasury Secretary: "Highly Likely" US To Run Out of Cash by June, US Default will cause more debt.
Source: Britannica

A failure to resolve the pending default could see interruptions to multiple government aid programs for retirees and veterans, stocks plummeting, and even higher hikes in interest rates. Millions of jobs are also in jeopardy.