House Republicans aren’t buying Treasury Secretary Janet Yellen’s warning that the US government will run out of money as soon as June 1, or her dire forecast of a default, preventing any haste to raise the debt limit.
“We want to see the full transparency of how he got to this day,” House Majority Leader Steve Scalise told reporters after a closed-door hearing Tuesday. “It looks like they’re closing the door now and opening the door to get that day back.”
One House Republican, who asked not to be named to speak freely about his party’s investigation, said he believes the U.S. will have to stop paying government bills first if the Treasury Department loses its debt service before Congress allows it to borrow more.
White House press secretary Karine Jean-Pierre rejected efforts by Republicans to play down the risks of instability.
“Everyone knows that the consequences of the first breach of trust would be disastrous for the American people and the American economy,” Jean-Pierre told reporters at the White House. “It could eliminate 8 million jobs, destroy the economy, destroy retirement accounts, increase costs, destroy our reputation around the world.”
The Treasury Department last week asked government agencies to ensure they provide “accurate and timely information” to help forecast daily cash flow and debt, according to a memo obtained by Bloomberg News.
The Washington Post previously reported on the memo and cited people familiar with the matter who said the department was also asking whether any payments could be made later.
Yellen has repeatedly said that the Treasury is at risk of not having enough money to cover all of its payments until tax receipts are due on June 15.
The Treasury is not alone in its intentions. Congressional Budget Office he said there is a “high risk” of payment failure in the first two weeks of June without credit. The Bipartisan Policy Center said Tuesday that there is a “significant threat” of that happening between June 2 and 13.
Analysts at Goldman Sachs Group Inc. and Wrightson ICAP has penciled in June 7-8 as a high-risk area; Morgan Stanley says June 8 is its X-date base, when the Treasury runs out of cash.
Many congressional Republicans are ignoring the urgency expressed by the White House, US regulators and financial markets is a troubling sign of the negotiations. continue on Tuesday. House Republicans and Biden’s administration stayed at the Capitol on Monday night and met again on Tuesday to continue their sales pitch.
‘I Got Money’
Representative Chip Roy of Texas called the indefinite warnings a “manufactured problem” to force Republicans to abandon their proposal.
“The fact is, we will have money in June,” Roy told reporters on Tuesday. “The reality is that we will not default on our debt. That is completely false. We have the money to do that.”
Roy and other conservatives like Matt Gaetz of Florida questioned Yellen’s designation of June 1 as an X-date, and told reporters to “ask her about her Ouija board.”
Speaking to reporters Monday night at the Capitol, after returning from the White House, McCarthy insisted that the real problem is that government spending must be reduced. Asked Tuesday if he believed June 1 would be the deadline for his talks with President Joe Biden, McCarthy was noncommittal.
Photo by McCarthy
“I don’t pick a deadline,” McCarthy said. “Janet Yellen decides the deadline. She assures me what it is and I just follow what she says.”
For weeks, White House officials have emphasized publicly the need to increase the debt quickly. Last week, Mr. Biden called off stops in Papua New Guinea and Australia following the Group of Seven summit in Japan to return to Washington for talks.
And Mr. Biden himself emphasized urgency with Mr. McCarthy and other congressional leaders before leaving for his trip, Mr. Jean-Pierre told reporters on Saturday.
“The president has sat down twice with the leaders of Congress recently to hear them, to discuss, to discuss his budget, to talk about the need to reduce the debt, Congress is working,” he said.
Even the biggest banks and financial institutions they are preparing emergency plans in the event of technological instability, a real global economic collapse has yet to be attempted.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon warned earlier this month that while going to the brink is dangerous, it has unintended consequences.
Yellen declined to say how the Treasury would act if it ran out of money, saying only that “there will be difficult decisions to make.”
-Contributed by Ari Natter and Justin Sink.