US Treasury chief still thinks it's possible to default as early as June 1

WASHINGTON: The US may default on its federal debt as early as June 1 if the White House and Congress fail to agree on raising the national ...

WASHINGTON: The US may default on its federal debt as early as June 1 if the White House and Congress fail to agree on raising the national debt ceiling, US Treasury Secretary Janet Yellen said in a letter to congressional leaders.

"With an additional week of information now available, I am writing to note that we estimate that it is highly likely that Treasury will no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1," she said.

According to Yellen, she has repeatedly warned that if Congress fails to raise the federal borrowing limit, it would lead to "economic and financial catastrophe" for the US and global economies that depend on the dollar.

"We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit 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," the official wrote.

The US administration has called on Congress recently to raise the national debt ceiling that is now set at $31.4 trillion. Republicans, who are in control of the House of Representatives, are traditionally skeptical about allowing greater debt and are pushing for reducing government spending.

-News Feed