Treasury Secretary Janet Yellen told Congress on Monday that the US is expected to reach the debt limit as early as June 1 if the body does not raise or suspend the debt limit before then.

In a letter to House and Senate leaders, Yellen urged Congress to protect the full trust and honor of the United States by taking action as soon as possible to address the $31.4.

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trillion-dollar limit on its statutory borrowing power.

We have learned from previous debt limit deadlocks that waiting until the last minute to suspend or raise the debt limit can seriously damage business and consumer confidence, increase short-term borrowing costs for taxpayers and could have a negative impact on the creditworthiness of the United States. she said in the letter.

The Treasury said Monday it plans to increase lending in April

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Unpleasant

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in June 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 $449 billion more than expected in January, due to a lower cash balance at the start of the quarter and forecasts of lower-than-expected income tax receipts and higher spending.

What’s behind the looming ‘X date’ on the US debt limit?

While Russia’s invasion of Ukraine continues to weigh on US economic growth, Treasury Department officials say the debt ceiling debate poses the biggest risk to the US financial position.

Eric Van Nostrand, acting assistant secretary for economic policy, said in a statement that even if Congress eventually raises the debt limit before a default occurs, the resulting uncertainty could increase borrowing costs and create other financial stress that could affect our job market. and our position would weaken. in the world.”

In January, Yellen sent a letter to congressional leaders, saying her department had taken extraordinary measures to prevent the federal government from defaulting. She said it is critical that Congress act in a timely manner to raise or suspend the debt limit.

Democrats and the White House are urging Congress to raise the federal debt limit. President Biden wants the limit raised without negotiation. The Republican majority in the House recently passed a bill to secure spending cuts in exchange for raising the debt limit.

Yellen said at the Cap-to-Cap policy conference in Washington last week that Congress should vote to raise or suspend the debt limit, and that it should do so unconditionally and not wait until the last minute. I believe this is a fundamental responsibility of the leaders of our nations to make this happen.