(NewsNation) — In a new letter, U.S. Secretary of the Treasury Janet Yellen is urging House Speaker Kevin McCarthy to act “as soon as possible” on the debt ceiling, since she writes the Treasury may run out of funds by June.
“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,” Yellen said in the letter.
Yellen said her estimate could vary and is based on federal receipts, data and outlays.
As McCarthy and President Joe Biden struggle to reach a resolution, Yellen warns waiting until the last minute to suspend or increase the debt limit could cause serious harm to business and consumer confidence and negatively impact the credit rating of the U.S.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen said. “I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible.”
As June approaches, key disagreements between Biden and McCarthy on the debt ceiling include budget caps, defense dollars, work requirements for federal assistance programs and the proposed timeline for lifting debt.
Biden and McCarthy are set to meet late Monday at the White House.