When addressing US lawmakers recently, Janet Yellen made them aware that her departments use of special accounting techniques to stay within the federal debt threshold could be used up by the beginning of June.
In a letter to Speaker Kevin McCarthy, Janet Yellen said, “Our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, the actual date that Treasury exhausts extraordinary measures could be a number of weeks later than these estimates,” she wrote.
Limit Hit in January
The United States Treasury reached the statutory debt limit of $31.4 trillion in the beginning of 2023. Ever since then, Yellen and her team have been trying to think outside of the box by using certain accounting maneuvers in order to avoid a default on the countries federal debt obligations. However, according to the most recent statements made by Yellen, it seems like these options are beginning to become exhausted.
Biden Calls for Meeting
After Yellen addressed members of congress, President Biden got on the phone with Speaker Kevin McCarthy. The president invited McCarthy to the white house along with other lawmakers to discuss the debit limit. This meeting is said to be taking place on May 9th.
Congress Called to Act
In part of her address, Yellen called on Congress to help solve this problem. “Given the current projections, it is imperative that Congress act as soon as possible to increase or suspend the debt limit in a way that provides longer-term certainty that the government will continue to make its payments.”
Wrap Up
Members of congress on both sides of the aisle want to solve the federal debt problem before it becomes catastrophic. However, many members of congress have varying opinions on where the country should get the funding to help put a slight dent in the countries’ debt. With that being said, it is imperative that both sides of the aisle work together to find a solution before it becomes too late.