Without Debt Ceiling Increase, U.S. Could Run Out of Funds By June 1, Treasury Secretary Says

Treasury Secretary Janet Yellen states that the U.S. could run out of funds by June 1 if the concerns about the debt ceiling would not be addressed soon. If this happens, the economic crisis will risk millions of jobs and aggravate the global economy.

Treasury Secretary Janet Yellen wrote a letter to House Speaker Kevin McCarthy that says the U.S. government will fail to fulfill its obligations by June 1 if the Congress does not address the concerns about the debt ceiling as soon as possible.

According to Kaplan, Yellen established June 1 as the projected date the U.S. government will run out of funds and fall into an unmatched economic crisis. Yellen adds that this will risk millions of employment and even aggravate the economy worldwide. The deadline comes after the Republicans pushed forward an increase in the debt ceiling with cuts in spending, banning the student loan forgiveness plan, and improving the requirements for welfare programs.

READ ALSO: Debt Ceiling Crisis: Senator Manchin Proposes Solution To Avoid Financial Catastrophe And Preserve Social Security

Congress Must Increase Debt Ceiling

According to Debusmann Jr., however, despite Yellen’s recent projections, a resolution from the Congress still seems unlikely. This is because Moody’s Analytics discovered that the Limit, Save, Grow Act of 2023 which addresses the debt ceiling would risk around 780,000 jobs in the U.S. by the end of 2024. Furthermore, the short-term increase could also worsen the economic uncertainty.

On May 1, Senate Majority Leader Chuck Schumer stated that the Limit, Save, Grow Act of 2023 has no hope of becoming law. In addition, the U.S. President Joe Biden has also pledged to veto the legislation if it arrives on his desk. Reports say Biden will instead push for an increase without add-ons and restrictions.

READ ALSO: Newsbreak: House GOP Proposes Controversial Plan To Increase Debt Limit By $1.5 Trillion With Conditions On Domestic Programs And Pentagon Exemption, Drawing Criticism From President Biden