Yellen Warns Treasury To Run Out Of Cash As Soon As June 1 Absent Debt Ceiling Deal

Have you heard of the debt ceiling? It’s the limit on how much money the U.S. government can borrow to pay its bills. Well, there’s a problem - the Treasury Department could run out of cash as soon as June 1 if Congress doesn’t raise the debt ceiling. This warning comes from Treasury Secretary Janet Yellen, who is urging lawmakers to act quickly to prevent a potentially catastrophic default on U.S. debt.

The U.S. has already surpassed its debt ceiling, which was set at $28.4 trillion in 2019. Since then, the government has continued to spend more money than it brings in, largely due to COVID relief measures and other emergency spending. The Treasury has been using “extraordinary measures” to keep the government afloat, but those measures will run out in June unless Congress steps in.

If the debt ceiling is not raised or suspended, the government will have to prioritize which bills to pay and which to delay. This could lead to a government shutdown, damage to the U.S.’s credit rating, and a ripple effect through the global economy. Yellen is urging Congress to act quickly, saying, “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.”

This is not a new issue - the U.S. has faced similar showdowns in the past, most recently in 2019. But with the pandemic still ongoing and the government continuing to provide relief to Americans and businesses, the stakes are higher than ever. It remains to be seen whether Congress will act in time to avoid a potentially catastrophic default.

In summary, the U.S. Treasury could run out of cash as soon as June 1 if Congress does not raise the debt ceiling. This could lead to a government shutdown and damage to the U.S.’s credit rating. Treasury Secretary Janet Yellen is urging lawmakers to act quickly to prevent a potentially catastrophic default on U.S. debt. This issue is not new, but with the pandemic ongoing and government relief measures continuing, the stakes are higher than ever.