Biden administration urges Congress to raise debt ceiling before June

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The Biden administration is urging Congress to raise the debt ceiling before June, claiming that as early as the beginning of next month, the government will not be able to satisfy its financial obligations.

In a letter addressed to Speaker of the House Kevin McCarthy that was obtained by NBC News, U.S. Secretary of the Treasury Janet Yellen pleaded her case for Congress to raise the debt ceiling.

Treasury Secretary Janet Yellen testifies during the Senate Finance Committee hearing on the The Presidents Fiscal Year 2024 Budget, in Dirksen Building on Thursday, March 16, 2023.  (Tom Williams/Getty Images, File)

"In my January 13 letter, I noted that it was unlikely that cash and extraordinary measures would be exhausted before early June," Yellen said. "After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time."

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The secretary was unable to provide an exact date on when the Treasury would be unable to pay the bills, though she said she would continue to keep Congress up to date as more information becomes available.

Yellen also said the Treasury would be suspending the issuance of state and local government series (SLGS) Treasury securities, which are special-purpose securities that are issued to states and municipalities to help them comply with tax rules.

Members talk on the floor of the House Chamber on the opening day of the 118th Congress on Tuesday, January 3, 2023, at the U.S. Capitol in Washington, D.C. (Jabin Botsford/The Washington Post via Getty Images, File)

"When Treasury issues SLGS, they count against the debt limit," Yellen said. "Treasury will take this action to manage the risks associated with the debt limit, but it is not without costs, as it will deprive state and local governments of an important tool to manage their finances."

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As Yellen’s letter became known, Fox News confirmed that Biden called the top four Congressional leaders and invited them to the White House to discuss the debt ceiling May 9.

Time is ticking, though.

Yellen warned McCarthy in the letter that waiting until the last minute to suspend or increase the debt limit can harm businesses and consumer confidence, while also raising short-term borrowing costs for taxpayers and negatively impacting the credit rating of the country.

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"If congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests," she said. "I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible."

Chad Pergram of Fox News contributed to this report.