U.S. Treasury Secretary Janet Yellen has reiterated that June 1 remains a "hard deadline" for raising the federal debt limit, warning that the government may be unable to pay all its bills by that date. Speaking on NBC's "Meet the Press" program, Yellen stressed the urgency of the situation, emphasizing that hard choices would have to be made about payments to Americans if the debt ceiling is not raised. With less than two weeks until the deadline, there are concerns about the potential default triggering chaos in financial markets and causing a spike in interest rates.
President Joe Biden has called the Republicans' latest offers on lifting the debt ceiling "unacceptable" but expressed a willingness to consider spending cuts along with tax adjustments to reach a deal. Biden plans to discuss the matter with top congressional Republican Kevin McCarthy on his flight back from the Group of Seven (G7) summit in Japan.
Yellen acknowledged some uncertainty about the exact timing of when the Treasury would run out of cash, commonly referred to as the x-date, but she expressed doubt that the money would last through June 15. The odds of being able to pay all bills beyond that date are considered quite low.
While Biden mentioned the possibility of invoking the 14th Amendment to raise the debt ceiling without congressional approval, he noted the limited time available to pursue this untested legal theory to avoid default.
The coming days will be crucial in determining whether Congress can reach an agreement to raise the debt ceiling in time and avoid potentially severe consequences for the U.S. economy and financial markets.