BBC reported that US Treasury Secretary Janet Yellen has warned that the US may run out of cash by 1 June if Congress fails to raise or suspend the debt ceiling.
Reaching the debt ceiling would mean that the government is unable to borrow any more money. The debt ceiling has been raised, extended or revised 78 times since 1960.
On Monday, Yellen urged Congress to act “as soon as possible” to address the $31.4tr (£25.12tr) limit. President Biden has called a meeting of congressional leaders on the issue on 9 May.
A default – which would be the first in US history – could upend global financial markets and shatter trust in the US.
In a letter to members of Congress on Tuesday, Yellen said that “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.”
Ms Yellen added that it is impossible to know for sure when exactly the US will run out of cash.
