Treasury Secretary Janet L. Yellen said yesterday that the U.S. could run out of money to pay its bills by June 1 if Congress does not raise or suspend the debt limit, putting pressure on President Biden and lawmakers to reach a swift agreement to avoid defaulting on the nation’s debt, the New York Times reported. The more precise warning over when the U.S. could hit the so-called X-date dramatically reduces the projected amount of time lawmakers have to reach a deal before the government runs out of money to pay all of its bills on time. The new timeline could accelerate negotiations between the House, Senate and Mr. Biden over government spending. In response to Ms. Yellen’s new timeline, Mr. Biden on Monday called the top four leaders in Congress to ask for a meeting on May 9 to discuss fiscal issues. The president reached out to House Speaker Kevin McCarthy and Rep. Hakeem Jeffries of New York, the minority leader, along with Senate Majority Leader Chuck Schumer (D-N.Y.) and Senator Mitch McConnell (R-Ky.), the minority leader. Economists have warned that failure to raise the debt limit, which caps the total amount of money the U.S. can borrow, threatens to rock financial markets and throw the global economy into a financial crisis. Because the U.S. runs a budget deficit — meaning it spends more money than it takes in — it must borrow huge sums of money to pay its bills. In addition to paying Social Security benefits, along with salaries for the military and government workers, the U.S. is also required to make interest and other payments to the bondholders who own its debt.
