Treasury: U.S. Could Default by June 1 Absent Debt Ceiling Hike

May 2, 2023

The Treasury Department released its highly-anticipated update on the “X date” late yesterday amid stalled talks on a debt ceiling hike between President Joe Biden and House Speaker Kevin McCarthy (R-CA).

In her letter to congressional leadership, Treasury Secretary Janet Yellen warned that the federal government could reach its borrowing limit by June 1 — a month earlier than Treasury’s original timeframe of July-September — barring action from Congress to raise the debt ceiling and prevent a default. As a result, the president plans to meet with Speaker McCarthy, House Minority Leader Hakeem Jeffries (D-NY), and Senate Leaders Chuck Schumer (D-NY) and Mitch McConnell (R-KY) on Tuesday, May 9 when House lawmakers return from their congressional delegation (CODEL) abroad. However, the productivity of these talks remains to be seen, as both sides have been entrenched within their respective positions for several weeks.

Meanwhile, Leader Schumer made a series of key procedural moves late yesterday, including a move to bypass the committee process for both the House-passed Limit Save, Grow Act (text; summary), as well as a bill that would provide a “clean” debt ceiling hike until December 31, 2024. These moves will allow the Majority Leader to quickly call up these bills for consideration on the floor — possibly using the House-passed bill as a “shell” legislative vehicle to carry a bipartisan agreement. However, either debt ceiling measure will still require 60 votes to defeat a filibuster.