It seems 'almost certain' the US won't have enough cash to pay all of its bills by June 1 if lawmakers don't raise the debt ceiling, Janet Yellen warns

Treasury Secretary Janet Yellen issues a dire warning if debt ceiling negotiations are prolonged.Chip Somodevilla/Getty Images

• Treasury Secretary Janet Yellen reiterated her dire warning if debt ceiling negotiations are prolonged.

• If lawmakers don't reach a deal, the US could have a hard time paying its bills come June 1.

• Yellen still thinks "a deal is possible," adding that officials are "working toward an agreement that could command bipartisan support."

Treasury Secretary Janet Yellen reupped her warning on Wednesday that if lawmakers don't raise the debt ceiling soon the US will be strapped for cash and have a hard time paying its bills come June 1.

"It seems almost certain that we will not be able to get past early June," Yellen said during a virtual appearance at The Wall Street Journal's CEO Council Summit on Wednesday.

Yellen added: "If Congress doesn't act to raise the debt ceiling, and if we hit the so-called X-date without that occurring, there will be some obligations that we will be unable to pay."

However, President Joe Biden and House Speaker Kevin McCarthy continue to disagree over conditions to raise the government's debt limit. If the parties don't reach an agreement by early June, the Treasury will risk defaulting on its obligations like making certain payments on debt-service expenses or salaries for government workers.

"We are committed to not having missed payments and raising the debt ceiling so that's not a situation we face," Yellen said. "We're not involved in planning for what happens if there's a default."

Despite sounding the alarm, Yellen remains optimistic that policymakers will be able to come to a resolution soon.

"I think a deal is possible," she said. "They're working toward an agreement that could command bipartisan support."

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