Treasury Secretary Janet Yellen joined ABC’s George Stephanopolous on Sunday’s broadcast of “This Week” and cautioned that the United States is well on its way to facing an economic disaster, saying it could take place as early as next month.
Currently, Yellen is predicting that the nation may run out of cash as soon as June 1st.
After being asked by Stephanopolous if there are any extraordinary measures she can take to quell the situation, she replied that the “ability to do that is running out” and that the U.S. government will not be able to pay its bills unless Congress puts the debt ceiling up.
She continued, “Of course, it’s appropriate to have negotiations about the budget, about spending priorities. President Biden has presented a detailed budget that does cut deficits by $3 trillion over 10 years while investing in the strength of the American economy. But we do need to raise the debt ceiling to avoid economic calamity.”
Stephanopolous pressed Yellen to paint a picture of what a hypothetical catastrophe on June 1st looks like. In her answer, Yellen said, “this would be really the first time in the history of America that we would fail to make payments that are due,” adding that essential government functions such as paying out Social Security recipients or Medicare providers would be jeopardized due to a lack of available spending money.
According to Yellen, “it’s widely agreed that financial and economic chaos would ensue.”
Treasury Sec. Janet Yellen: "Our current projection is that in early June a day will come when we are unable to pay our bills unless Congress raises the debt ceiling." pic.twitter.com/Z8b3iKnzHy
— The Post Millennial (@TPostMillennial) May 7, 2023
She made similar comments Monday on CNBC’s “Closing Bell: Overtime.”
These remarks by Yellen come as House Republicans and President Joe Biden continue to argue over the federal budget, with both sides blaming the other for the damaged economy that is expected to come soon. GOP lawmakers have offered a budget plan and promised to only allow the debt ceiling to go up if spending cuts occur, with Biden and the Democrats being completely unwilling to engage in any type of compromise, reported RedState.
According to the outlet, should the two parties not eventually reach some type of agreement, the U.S. is at risk of defaulting on its debt as it is being dried of money needed to finance operations.