While appearing on NBC News’s “Meet the Press” on Sunday, Treasury Secretary Janet Yellen said that the United States would not make it to June 15 without defaulting on the debt if a deal to raise or suspend the debt ceiling is not reached by June 1.
When asked by host Chuck Todd what the odds are that the US “can get to the June 15 tax receipts” before the government hits the current debt ceiling, Yellen noted that there is “always uncertainty” with spending and tax receipts. She explained that it would be impossible to be “absolutely certain” but suggested that the odds of being able to pay “all of our bills” before the June 15 tax receipts arrive are “quite low.”
On Monday, Yellen notified Congress that it is no longer simply “likely” but “highly likely” that the government will be unable to pay its bills by June 1 at the soonest if a deal is not reached between the White House and Congress, the New York Times reported.
Yellen warned that it was “highly likely” that the Treasury will be unable to “satisfy all of the government’s obligations” if the debt ceiling is not raised or suspended in less than two weeks. In previous letters to Congress, Yellen described the June 1 deadline as only “likely.”
In a letter sent to Congress last week, Yellen conceded that her estimate could be off since incoming tax receipts are unpredictable. She said the actual date on which the Treasury will exhaust the extraordinary measures it is using to delay default “could be a number of days” or even “weeks later” than predicted.
Yellen also told Chuck Todd that if Congress fails to raise the debt ceiling, the government would be forced to make difficult choices to meet its financial obligations which could disrupt benefit payments to veterans and retirees while causing stock prices to plunge and interest rates to soar.
