Treasury Secretary Janet Yellen Urges Congress to Take Action to Avoid Potential Default on Government Obligations by June 1

The United States Treasury and Secretary Janet Yellen have issued a warning to congressional leaders that the country may be unable to pay its bills as soon as June 1. This is a much faster timeline than many had previously thought.

In a letter to congressional leaders of both parties, Yellen said that after reviewing recent federal tax receipts, the Treasury’s best estimate is that the government will be unable to continue to satisfy all of its obligations by early June, and potentially as early as June 1.

The warning comes as the government is facing a looming debt limit, which is the amount of money the government can borrow to pay its bills. If the debt limit is not raised or suspended before June 1, the government will not be able to pay its bills.

Yellen urged Congress to take action to raise or suspend the debt limit before June 1 in order to avoid a potential default on the government’s obligations. She also noted that the Treasury is taking steps to conserve cash, including suspending investments in certain federal retirement funds, but that these measures will not be enough to avoid default.

The warning from Yellen is a stark reminder of the need for Congress to act quickly to raise or suspend the debt limit in order to avoid a potential default on the government’s obligations. Without action, the government could be unable to pay its bills as soon as June 1.