Treasury Secretary Janet Yellen has warned that failure to raise the debt ceiling will result in a "steep economic downturn" in the U.S. and reiterated her warning that the Treasury Department may run out of measures to pay its debt obligations by June. Yellen said that the U.S. has already been using "extraordinary measures" to avoid default, and it's not something the Treasury Department can continue to do. Lawmakers have been trying to find a path forward to raise or suspend the debt ceiling, but they're currently at an impasse, raising the prospect of default. Yellen has called for decisive action, and quickly. In a letter to House Speaker Kevin McCarthy, R-Calif., Monday, Yellen said new data on tax receipts forced the department to move up its estimate of when the Treasury Department "will be unable to continue to satisfy all of the government's obligations" to potentially as early as June 1. This date is earlier than Wall Street economists were expecting.
On Monday, President Joe Biden called the "big four" congressional leaders to invite them to a May 9 meeting at the White House to discuss the debt limit. House Democratic Leader Hakeem Jeffries said Sunday that the meeting Biden has organized is "very important" and will help the U.S. find a way forward. However, Sen. James Lankford, R-Okla., said that the meeting about the debt ceiling should have happened much sooner. He said the issue was raised the week after the election in November, and that President Biden's refusal to negotiate has been "stunning."