Treasury Secretary Janet L. Yellen has warned that the United States could run out of money to pay its bills as early as June 1 if Congress does not act soon.
In a letter to Congress on Monday, Yellen said it is now “highly likely” that the government will reach its debt limit before the end of May and be unable to borrow more money.
Yellen urged lawmakers to act quickly, saying that the June 1 deadline is a “hard deadline” for raising the debt ceiling. She noted that if Congress does not raise the debt limit, the government would be unable to pay its bills and could default on its debt payments.
The Treasury Secretary also warned that if Congress fails to act in time, it could have serious consequences for the U.S. economy and financial markets. She said a default on U.S. debt would cause interest rates to rise, leading to higher borrowing costs for businesses and consumers alike.