Janet Yellen Is Reaching Out to CEOs to Warn Them of US Default Risks

• Janet Yellen is warning CEOs on the “catastrophic” economic impact to come if the US defaults on its debt, Reuters reported.
• The Treasury Secretary recently said the government could run out of money as soon as June 1. 
• She told ABC News on Sunday that Congress failing to raise the $31 trillion debt ceiling could cause “an economic and financial catastrophe.” 

Treasury Secretary Janet Yellen is personally calling up CEOs and other business executives to warn them of the “catastrophic” impact to come should the US government default on its debt obligations, according Reuters. 

Yellen is reaching out to leaders in the financial sector to alert them of the “dangerous consequences of the current brinkmanship,” according to a Monday report by Reuters, who cited two unnamed sources familiar with the matter. 

The Treasury Secretary has continued to urge Congress to raise the debt ceiling and recently warned that the government could run out of money and trigger an economic crisis that will cost millions of jobs and roil the global economy as soon as June 1. 

And although the sources didn’t reveal to Reuters her purpose for the calls, officials from US President Joe Biden’s administration have reportedly been in talks with business executives about pushing Republicans to raise the US debt ceiling without conditions. 

She delayed her trip to Japan for this week’s G7 meeting in order to give an interview with ABC News on Sunday, Reuters reported, where she warned that Congress failing to raise the $31 trillion debt ceiling could cause “an economic and financial catastrophe.” 

“There is no way to protect our financial system and our economy other than Congress doing its job and raising the debt ceiling and enabling us to pay our bills. And we should not get to the point where we need to consider whether the president can go on issuing debt. This would be a constitutional crisis,” Yellen told ABC News on Sunday. 

The Republican-controlled House of Representatives on April 26 passed a bill from House Speaker Kevin McCarthy. The bill offered to lift the debt ceiling in exchange for government spending cuts of roughly 8% in 2024, among other terms. But democrats are calling for a “clean” bill that raises the debt ceiling without conditions. 

Biden has invited congressional leaders McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Charles Schumer and Senate Minority Leader Mitch McConnell to a meeting on Tuesday to work on an agreement, Reuters said.