Janet Yellen Warns The US Government Could Run Out Of Money June 1, Calls On Congress To Raise Debt Limit

U.S. Treasury Secretary Janet Yellen warned Monday afternoon that the government’s debt-limit measures may be exhausted by June 1, meaning the government would be out of funds to keep services such as Social Security running.

Yellen called on Congress to raise the debt limit, to ensure the government is able to pay the bills come June 1.

“Our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June,” Yellen said in her statement. 

Now, before you start freaking out about the government running out of money, it’s important to keep in mind that this has happened before. Congress has revised the debt ceiling 78 times since 1960 according to NPR. 

The current debt limit for the U.S. is $31.4 trillion. The government surpassed this in January but has been able to keep things running using “debt-limit measures” which can only last so long.

See Also: McCarthy's Plan To Raise Debt Ceiling By $1.5 T Means Axing Biden's Student Loan Forgiveness Plan

Because Republicans and Democrats have been unable to come to a bipartisan agreement to raise the debt ceiling, Congress is now on the clock. If it is unable to come to an agreement, a government shutdown could be on the horizon. 

One unorthodox solution floated by many in the economic space is for President Joe Biden and the White House to mint a trillion-dollar coin. The administration could then use the coin to pay off $1 trillion worth of the country’s debt, allowing the wheels to keep turning without a shutdown.

On the flip side, the coin would just be a band-aid solution until the country hits its debt limit again. 

Read Next: Paul Krugman Tells Why Trillion-Dollar Coin To Resolve US Debt Crisis Won't Be Inflationary

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