Yellen warns Congress of debt default date

In a letter published Monday afternoon, Treasury Secretary Janet Yellen warned Congress that the country could default on its debt as early as June 1. The United States will shortly be unable to meet its financial obligations without borrowing more since it ran up against its $31.4 trillion debt ceiling at the beginning of this year. Yellen reaffirmed that it is impossible to know the exact date the U.S. will deplete its funds, and noted that the day could come weeks after June 1. She called on congressional leadership to pass a funding bill immediately. President Joe Biden phoned all four Congressional leaders and invited them to a May 9 meeting at the White House to discuss the debt.

Why does that matter? The country has always been able to pay back its debts. Yellen and many other financial experts have strongly asserted that a default could have disastrous economic implications, likely setting off a recession. Republican leaders in the House of Representatives have said they will only raise the debt limit if Biden agrees to make spending cuts that will address the country’s ballooning debt. In response, the president stated he will not negotiate until Congress passes a debt ceiling increase.

Dig deeper: Read my coverage in The Stew of where negotiations over federal spending stand on Capitol Hill.