MNI BRIEF: US Could Breach Debt Limit By June 1, Yellen Warns

Treasury Secretary Janet Yellen warned Monday that the U.S. could default as early as June 1 if Congress doesn’t clear a bill to raise the debt limit.

The latest guidance increases pressure on Congressional leaders and the White House, laying out a shorter timeline to strike a deal to raise the debt ceiling. House Republicans recently passed legislation to raise the debt limit into next year, along with severe spending cuts, that President Joe Biden has dismissed as a nonstarter.

"After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government's obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time," Yellen wrote in a letter. "This estimate is based on currently available data, as federal receipts and outlays are inherently variable, and the actual date that Treasury exhausts extraordinary measures could be a number of weeks later than these estimates."

The CBO said Monday it sees greater risk that the Treasury will run out of funds in early June.