U.S. Treasury Secretary Janet Yellen warned Monday in a CNBC interview that the U.S. might face financial chaos if Congress does not lift the debt ceiling before June 1, the date when the Treasury could effectively run out of cash.
Yellen is also reaching out to corporate and financial executives to convey the “catastrophic” impact a U.S. default on its debt would have on the nation and worldwide economy, according to a Reuters article on Monday.
Yellen further added that failing to raise debt limit would have an adverse impact on the U.S. dollar as a reserve currency.
“That is something that could produce financial chaos, it would drastically reduce the amount of spending and would mean that Social Security recipients and veterans and people counting on money from the government that they’re owed, contractors, we just would not have enough money to pay the bills,” Yellen remarked.
See Also: Debt Ceiling Hike Opposed By 43 Republican Senators ‘Without Substantive Spending And Budget Reforms’
The Clock is Ticking: Before the Treasury runs out of liquidity, Congress must decide whether to increase the $31.4 trillion debt ceiling or suspend it. Time is running out to reach an agreement since there are just eight days remaining in May when both the House and Senate are expected to be in session at the same time.
President Joe Biden will meet with key congressmen on Tuesday, including House Speaker Kevin McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell.
The SPDR S&P 500 ETF Trust SPY was flat for the day at $412.74 market end on Monday
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