Analysts have warned defaulting on the country’s debt could tip the economy into recession and prevent the government from paying bills, including Social Security payments and military salaries.
Topline
Treasury Secretary Janet Yellen on Monday doubled down on her June 1 deadline for Congress to raise the debt ceiling, writing in a letter to House Speaker Kevin McCarthy (R-Calif.) it is “highly likely” the government could run out of money to pay off its bills in 10 days, as negotiations come to a boiling point and the country risks defaulting on its obligations for the first time.Key Facts
Yellen reiterated her weeks of pleas for Congress to strike a deal to raise the debt ceiling, saying that as more information becomes available, the Treasury estimates it is “highly likely” it won’t be able to satisfy “all of the government’s obligations” if Congress fails to act by early June, and possibly by June 1.
Failing to raise the debt limit could cause “severe hardship to American families,” cause people to question the federal government’s ability to defend its national security interests and “harm our global leadership position,” Yellen warned.
