Yellen warns government may not pay all bills next month.

U.S. Treasury Secretary Warns of Impending Debt Crisis

Janet Yellen Urges Action to Avoid Default

U.S. Treasury Secretary Janet Yellen has issued a warning that the federal government may not be able to pay all its bills before June 15, highlighting the urgent need to resolve the standoff between the White House and House Republicans over raising the debt ceiling. Speaking on NBC’s “Meet the Press,” Yellen emphasized the uncertainty surrounding tax receipts and spending, stating that the odds of being able to pay all bills by June 15 are “quite low.”

If the $31.4 trillion debt ceiling is not raised before the Treasury runs out of cash, hard choices will have to be made about payments to Americans. With less than two weeks until June 1, the Treasury Department has warned that the federal government could default on its debts, causing chaos in financial markets and spiking interest rates.

President Biden Considers 14th Amendment

While in Japan, President Joe Biden suggested that he may invoke the 14th Amendment to the U.S. Constitution to raise the debt ceiling without Congress. However, Yellen believes that this untested legal theory is not appropriate given the legal uncertainty and tight time frame.

Republicans and Democrats Blame Each Other

House Speaker Kevin McCarthy (R-Calif.) has stated that he cannot start negotiations until Biden returns from his Asia trip, while both Biden and Republicans have blamed each other for the impasse. McCarthy accused Biden of being willing to default on the debt to appease “radical socialists,” while Biden claimed that “MAGA Republicans” are pushing extremist policies.

Hard Choices Ahead

Yellen reiterated that some bills will not be paid if the United States pushes up against the debt ceiling deadline, emphasizing the need for action to avoid default. “There will be hard choices to make if the debt ceiling isn’t raised,” she said.

• Less than two weeks remain until June 1, when the Treasury Department has warned that the federal government could be unable to pay all its debts.
• President Biden suggested he may invoke the 14th Amendment to raise the debt ceiling without Congress.
• House Speaker Kevin McCarthy (R-Calif.) accused Biden of being willing to default on the debt to appease “radical socialists.”
• Yellen reiterated that some bills will not be paid if the United States pushes up against the debt ceiling deadline.

It is clear that urgent action is needed to avoid a potential debt crisis. The consequences of defaulting on debts could be catastrophic for the U.S. economy and financial markets. It is time for both parties to put aside their differences and work together to find a solution.