Yellen: ‘Highly likely’ debt brink is early June

Treasury Secretary Janet Yellen amplified her warning to congressional leaders on Monday that the U.S. risks running out of borrowing power in just 10 days, as President Joe Biden and Speaker Kevin McCarthy look to salvage debt ceiling talks that nearly crumbled over the weekend.

In a new letter, Yellen added that “it is highly likely” the Treasury Department won’t be able to pay the bills in early June, potentially as soon as June 1. Thanks to a disappointing tax season that yielded less revenue than expected, it’s unclear whether the department can make it to June 15, when quarterly tax receipts come in. If Treasury can make it to the middle of next month, the department would unlock a cascade of cash that would keep the country safe from default through July or even August.

Yellen’s latest warning about the so-called X-date, now delivered weekly, continues to pile on the urgency as Biden and McCarthy plan to meet again at the White House on Monday night. Despite some optimism last week that Republicans and Biden officials were making progress toward an agreement to lift the nation’s $31.4 trillion borrowing cap, both sides spent the weekend accusing each other of moving backward in negotiations by making increasingly partisan offers.