U.S. Treasury Secretary Janet Yellen has warned Congress that the U.S. could default on its debt obligations "as early as June 1" if they fail to take action to either raise or suspend the debt limit before this date. Yellen warned that a default "would produce an economic and financial catastrophe" with the potential to cause "severe hardship to American families", "harm our global leadership position", and "raise questions about our ability to defend our national security interests". This warning comes as the Congressional Budget Office revised its estimate for when the U.S. could default due to lower than expected tax receipts through April, citing a greater risk that the Treasury could run out of funds in early June. President Joe Biden has invited congressional leaders to a meeting at the White House on May 9 to discuss the debt limit.

The Treasury Department has stated that "It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills". Yellen has advised Congress to "act as soon as possible to increase or suspend the debt limit, in a way that provides longer-term certainty that the government will continue to make its payments". She has explained that short-term procrastination "can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States."

Overall, it is clear that the issue of increasing or suspending the debt limit is of utmost importance to the U.S government and U.S. citizens alike. It is hoped that Congress will take timely and effective action on this pressing matter to avert the possibility of the U.S. defaulting on its debt, and prioritize the best interests of all American citizens.



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