WASHINGTON—Treasury Secretary Janet Yellen said the U.S. government could become unable to pay all of its bills on time as soon as June 1 if Congress doesn’t first raise the debt limit.
President Biden on Monday invited the top Republicans and Democrats on Capitol Hill to meet next week to discuss raising the country’s roughly $31.4 trillion borrowing limit, the White House said soon after Ms. Yellen’s warning.
The new estimate released Monday sets a shorter timeline than forecasters had previously expected, putting the U.S. potentially just weeks away from the first default on the U.S. debt. Republicans and Democrats have been debating how to raise the debt ceiling for months, but they have so far made little progress toward reaching an agreement.
The Congressional Budget Office, a nonpartisan budget agency, updated its own projection on Monday after having previously forecast that the U.S. could default as soon as July. Lower-than-expected tax receipts this year create a “significantly greater risk that the Treasury will run out of funds in early June” than CBO had expected, the agency’s director said.
Ms. Yellen said the Treasury’s latest projection was still uncertain. The Treasury could ultimately be able to pay the nation’s bills for several weeks beyond early June, she said. The Treasury tends to be conservative when communicating projected deadlines for possible default.
“It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills,” Ms. Yellen wrote in a letter to House Speaker Kevin McCarthy (R., Calif.).