Treasury Secretary Janet Yellen sent a letter to congressional leaders warning that her department could default on its obligations if Congress fails to increase or suspend the borrowing limit as early as June 1.
“The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates,” Yellen wrote in the Monday letter.
She mentioned the potential impacts on the country’s credit rating, short-term borrowing costs and consumer and business confidence if Congress fails to raise the debt ceiling.
“I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible,” Yellen added.
A report from the Congressional Budget Office indicates that the U.S. government reached its statutory debt limit of $31.4 trillion on Jan. 19 and would not be able to pay its bills in the first two weeks of June if the debt ceiling remains unchanged.
“If the Treasury’s cash and extraordinary measures are sufficient to finance the government until June 15, expected quarterly tax receipts and additional extraordinary measures will probably allow the government to continue financing operations through at least the end of July,” the CBO report reads.