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According to Yellen, if Congress fails to reach an agreement on raising the country's $31.4 trillion borrowing limit by that time, it will be forced to default on "some bills" shortly after.
"There's always uncertainty about tax receipts and spending. And so it's hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15, while being able to pay all of our bills, is quite low... My assumption is that if the debt ceiling isn't raised, there will be hard choices to make about what bills go unpaid," Yellen said.
The treasury secretary did not say which 'bills' she had in mind, but noted that the government's most immediate obligations range from paying interest on outstanding debt to "obligations to seniors who count on social security, military, contractors who've provided services to the government."
She added that "there can be no acceptable outcomes if the debt ceiling isn't raised."
The administration of US President Joe Biden and Republicans led by House Speaker Kevin McCarthy have been at an impasse over raising the debt ceiling for several months, despite warnings that the US could face its first-ever default unless it is raised by June 1.
Republicans are refusing to agree to the move unless Biden agrees to government spending cuts and curbs on social programs.
Some lawmakers have called on Biden to invoke his powers under the 14th Amendment to the Constitution and bypass Congress and unilaterally raise the debt ceiling. However, Biden told reporters on Sunday that while he has considered doing so, there is likely not enough time before the deadline.
Biden and McCarthy are scheduled to meet again on Monday to discuss the matter.
Reader Comments
Reported U.S. GDP is $23 Trillion but that peaked last year and is slipping. [Link]
Wiki says, "As of February 2023, total federal debt was $31.5 trillion; $24.6 trillion held by the public and $6.9 trillion in intragovernmental debt" [Link]
Remember when the World Bank/IMF destroyed the Greek economy in 2010 to recover money and resources they were 'owed'? People lost 10% or more of their savings, pensions were halved, private and corporate lending dried up and so did the private sector.
Their debt had peaked at 127% of GDP for a short while but had been running at 100% (break even) for several years before.
U.S. is sitting at a debt to GDP ratio of 137% and climbing by the hour. Is it time for 'Greek' Austerity measures in the U.S. ?
There are issues with freely printing money; namely that nobody else will want it.
People that invested in the U.S. expected their investment to hold value and that they would be repaid in a global trade currency. What happens when the greater part of the world economy suddenly won't honor a U.S. dollar?
I don't think it matters what Janet et al do at the moment because the U.S. is so f&*ked. They weaponized their weakening dollar and now it has more competition on the world market than it has ever experienced... and it does not look good.
So as Joe Biden keeps saying, "Don't worry, everything is fine!!
But is that the intent. Everything the Bribem admin has accomplished so far - wreck small business, genocide, open Southern border, raise racial tensions, raise sexual identity tension, try to ban weapons, promote a war in the Ukraine, give away billions to the Ukraine, selection-elections, weaponize the FBI against the American people - is the destruction of America.
Since those of us who are older, who still think critically, it makes psychopathic sense to cut off social security to reduce the thinking population further, continue the destruction. How will it unfold?