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Ryan King, Breaking Politics Reporter


NextImg:Janet Yellen says 'hard deadline' for US to breach debt ceiling hasn't changed

Treasury Secretary Janet Yellen indicated her "hard" June 1 deadline for the United States to potentially breach the debt limit hasn't changed.

"I certainly haven't changed my assessment. So I think that's a hard deadline," she told Meet the Press. "I would point out to the Congressional Budget Office has recently indicated that they expect early June will be a problem. And forecasters on Wall Street who look at information daily on our cash balances and resources agree."

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Some Republicans, such as Sen. John Kennedy (R-LA), have cast doubt on Yellen's projections, insinuating she is harboring political motivations. As Yellen pointed out, other groups have backed her prediction.

The treasury secretary also surmised the odds of making it to June 15 for another round of tax receipts is "quite low" but conceded it was difficult to know for certain. Yellen further argued, "It's not an acceptable situation for us to be unable to pay our bills."

Yellen also previewed how the department will react to a breach of the debt ceiling.

"My assumption is that if the debt ceiling isn't raised, there will be hard choices to make about what bills go unpaid," Yellen told NBC's Meet the Press. "We will have to pay interest in principle on outstanding debt; we also have obligations to seniors to count on Social Security, our military."

Yellen stressed that some bills will "have to go unpaid" but did not indicate default was a sure thing if the United States blows past the projected "X-date" for when the Treasury Department's "extraordinary" measures to keep funds flowing are extinguished.

Back in March, Yellen cast doubt on Republican plans for prioritization of spending in the event of a debt limit breach. Such plans call for the government to pay its most important obligations first, such as the interest on the national debt, while allowing less pressing expenditures to go unpaid while the government is blocked from borrowing more.

"We should not think that prioritization is a solution to the debt ceiling issue. Prioritization is simply not paying all of the government's bills when they come due," Yellen said at the time. "If we don't do that and think that there's some shortcut around it that will avoid economic chaos, we're kidding ourselves."

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Experts have raised concerns about the viability of prioritization to avert default, noting the complexity and wide day-to-day variations of government expenditures and receipts.

President Joe Biden is expected to hold a phone call with House Speaker Kevin McCarthy (R-CA) during his return flight back to the U.S. to discuss the debt limit impasse.