Yellen: US debt ceiling deadline remains unchanged.

Treasury Secretary Janet Yellen Stands Firm on Debt Limit Deadline

Treasury Secretary Janet Yellen has reiterated her stance on the “hard” June 1 deadline for the United States to potentially breach the debt limit. Speaking on Meet the Press, Yellen stated that she has not changed her assessment and that the Congressional Budget Office and Wall Street forecasters agree that early June will be a problem.

Biden Targets Taxes in Debt Ceiling Talks

President Joe Biden has indicated that taxes are not off the table in debt ceiling talks. However, some Republicans, such as Sen. John Kennedy, have cast doubt on Yellen’s projections, insinuating she is harboring political motivations. Yellen pointed out that other groups have backed her prediction.

The treasury secretary also surmised that the odds of making it to June 15 for another round of tax receipts are “quite low” but conceded it was difficult to know for certain. Yellen further argued, “It’s not an acceptable situation for us to be unable to pay our bills.”

Hard Choices to Make

Yellen previewed how the department will react to a breach of the debt ceiling, stating that “hard choices” will have to be made about what bills go unpaid. She stressed that some bills will “have to go unpaid” but did not indicate default was a sure thing if the United States blows past the projected “X-date” for when the Treasury Department’s “extraordinary” measures to keep funds flowing are extinguished.

Back in March, Yellen cast doubt on Republican plans for prioritization of spending in the event of a debt limit breach. Such plans call for the government to pay its most important obligations first, such as the interest on the national debt, while allowing less pressing expenditures to go unpaid while the government is blocked from borrowing more. Experts have raised concerns about the viability of prioritization to avert default, noting the complexity and wide day-to-day variations of government expenditures and receipts.

President Joe Biden is expected to hold a phone call with House Speaker Kevin McCarthy during his return flight back to the U.S. to discuss the debt limit impasse.

• Yellen stands firm on June 1 deadline for debt limit breach
• Biden targets taxes in debt ceiling talks
• Hard choices to make if debt ceiling is breached

It’s time for the United States to take action and avoid a potential economic crisis. Let’s hope that the government can come to a resolution before it’s too late.