FILE - U.S. Treasury Secretary Janet Yellen speaks at Johns Hopkins University School of Advanced International Studies, April 20, 2023, in Washington.

US Treasury Chief: ‘Financial Catastrophe’ if Debt Ceiling Not Increased

Ken Bredemeier

FILE – U.S. Treasury Secretary Janet Yellen speaks at Johns Hopkins University School of Advanced International Studies, April 20, 2023, in Washington.

WASHINGTON — U.S. Treasury chief Janet Yellen warned Sunday of an “economic and financial catastrophe” for the United States and the world economy if President Joe Biden and Congress cannot agree on raising the country’s debt ceiling so the government can continue to pay its bills.

“Early June is when we run out of cash” to pay ongoing bills, Yellen told ABC’s “This Week” show, although she allowed that there is “a lot of uncertainty” on exactly what day that might be.

The U.S. Treasury has already taken “extraordinary measures” to continue to pay debts since reaching the country’s $31.4 trillion borrowing limit in January, but Yellen said, “Our ability to do that is running out and we will start to run down our cash.”

“The day will come when we are unable to pay our bills,” she said.

Biden has invited top congressional leaders to the White House on Tuesday to discuss how to avert the looming crisis.

The Democratic president has for months called on Congress, including the House of Representatives narrowly controlled by Republicans, to hike the debt ceiling without other conditions.

But instead, House Republicans, by a two-vote margin, last month approved a debt ceiling increase for a year while attaching broad government spending cuts for social programs and climate control measures that Biden and congressional Democrats oppose…

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