US potential to default on its debt as early as June 1 if Congress doesn’t act

Treasury Secretary Janet Yellen has warned that the US government could default on its obligations as early as Jun. 1 if Congress does not address the debt limit before then. Yellen stated that the actual date that the Treasury exhausts its ability to pay the government’s bills on time and in full could be “a number of weeks later than these estimates” due to the variable amount of revenue the federal government collects and spends. The likelihood of an early June default increased in recent weeks when April tax receipts were coming in weaker than expected. However, if tax collections wind up being enough to keep the Treasury’s coffers flush through early June, then it’s likely the government won’t default until much later in the summer. President Joe Biden has invited all four congressional leaders to a May 9 meeting to discuss the need to pass a clean bill to raise the debt ceiling. The White House is maintaining its position that it will not negotiate over the debt ceiling. This announcement comes after the House recently passed a debt spending bill that links spending with GOP policy changes.

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