US Treasury Secretary Janet Yellen said on Sunday that June 1 remains the date on which the US could default on its sovereign debt for the first time and stressed that “tough decisions” would have to be made then.
“If the debt ceiling is not raised, tough decisions will have to be made. Since 1789 the United States has paid its bills on time. That’s what the world wants to see, a commitment to continue to do that,” she said on NBC’s “Meet the Press”.
Yellen stressed that if an agreement is not reached there will be “some bills” that cannot be paid, but she did not specify which sectors would be affected because she said they are focused at the moment on how to raise that limit, which was $31.4 trillion and was reached in January.
The government is drawing on money in its reserves to pay off the debt it has incurred, but the Treasury Department estimates that those reserves will run out on 1 June, a deadline it reiterated has not changed.
Sanders-led Democrats call for Biden to bypass Congress and raise debt ceiling
Some Democrats and lawmakers such as the left-wing Bernie Sanders have already called on President Joe Biden to use his 14th amendment power to raise the debt ceiling without congressional authorisation.
“It doesn’t seem appropriate under the circumstances, given the legal uncertainty surrounding it and the short time frame. My deep hope is that Congress will raise the debt limit,” Yellen said.
The United States has never defaulted on its national debt, but every so often it is faced with that possibility because, unlike other countries, its executive branch can only issue debt up to the limit set by Congress, which has the power to suspend that ceiling as it sees fit.
Biden has conveyed to the G7 leaders at the summit held in Hiroshima (Japan) “certainty” about the possibility of reaching an agreement with the Republican opposition and returns to Washington this Sunday to continue negotiations.
