Treasury Secretary Janet Yellen has notified Congress that the US is projected to reach its debt limit as early as June 1 if the body does not raise or suspend the limit before then. In a letter to House and Senate leaders, Yellen urged Congress “to protect the full faith and credit of the United States by acting as soon as possible” to address the USD 31.4 trillion limit on its legal borrowing authority.
The Treasury Department said on Monday it plans to increase its borrowing during the April-June quarter of this year, even as the federal government is close to breaching the debt limit. The US plans to borrow $726 billion during the quarter. That’s USD 449 billion more than projected in January, due to a lower beginning-of-quarter cash balance and projections of lower-than-expected income tax receipts and higher spending. While Russia’s invasion of Ukraine remains a burden on US economic growth, Treasury officials say the debate over the debt ceiling poses the greatest risk to the US financial position.
This has prompted President Biden to invite House Speaker Kevin McCarthy to the White House to discuss raising the nation’s borrowing limit. The meeting is expected to take place on 9 May, according to the New York Post. Biden reached out to McCarthy to set up a meeting with other lawmakers as the House speaker visited Jerusalem on Monday in celebration of Israel’s 75th anniversary, the White House said in a statement. Aside from McCarthy, Biden also reached out to Senate Majority Leader Chuck Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-Ky.), and House Minority Leader Hakeem Jeffries (D-NY). Biden told them that he wants to discuss passing a clean debt ceiling bill.
Democrats and the White House are pushing for Congress to increase the federal debt limit. President Joe Biden wants the cap raised without negotiation. The House Republican majority has most recently passed a bill to secure spending cuts in exchange for a debt limit increase.
Yellen said last week at the Cap-to-Cap policy conference in Washington that “Congress must vote to raise or suspend the debt limit, and it should do so without conditions and not wait until the last minute. I believe that it is a basic responsibility of our nation’s leaders to get this done.”