On Monday, US Treasury Secretary Janet Yellen sent a letter to congressional leaders reminding them that they must act by June 1 to prevent a default on the country’s debt. The pressure on the White House and the Republican-majority House to strike a final agreement has been increased after she said she expects the United States to be formally unable to pay its due commitments as early as June 1st.
At first, the Secretary of the Treasury told Congress that it was highly unlikely that the government would exhaust all of the “unusual procedures” it has been using to pay its bills by early June. Yellen predicted that the deadline will come sooner than expected because of recent tax receipts.
The United States faces “a significantly greater risk” that the Treasury may not have adequate cash in early June, the Congressional Budget Office (CBO) said on Monday, citing lower-than-anticipated April collections. CBO Director Phillip Swagel reported that last month’s income tax collections came in lower than the most recent baseline budget estimates had predicted. The CBO, he added, anticipates that this year’s tax returns will be processed more quickly than last year’s, after several years of volatility due to the epidemic.
The timeline gives lawmakers and President Biden enough time to negotiate a solution, which is welcomed by experts. Democratic senators, meanwhile, were quick to blame Republicans after Yellen’s comments. One example is Senator Jon Tester of Montana, who recently urged the Republican Party to “get this figured out.”
However, there were Republicans who were quite critical of Vice President Biden. Some, like Senator John Cornyn of Texas, have said that Yellen’s comments provide US President Trump the knowledge he needs to “get off the couch” and negotiate with House Speaker and fellow Texan Republican Kevin McCarthy.
