In her final appearance before Congress as chair of the Federal Reserve, Janet Yellen suggested Wednesday that the United States could run out of money by Dec. 15 because of the need to pay interest on its growing debt.
In her testimony before the House Financial Services Committee, Ms. Yellen said, “It is feasible that at the end of December, the federal government could exhaust the borrowing authority established by the debt limit.”
The debt limit, which Congress must renew every year, was recently set at $20.31 trillion. The government is expected to spend $19.9 trillion this year, meaning that it will run out of money after the end of December.
President Trump recently said he would be willing to use his veto pen to block the passage of the spending bill, but Mr. Trump has not yet exercised it. He is scheduled to visit Capitol Hill on Friday to meet with Republican leaders to ask them to pass the bill and continue spending money.
“To avert a crisis, Congress must act by Dec. 15,” Ms. Yellen said. “With just a few days remaining, it would be virtually impossible for Congress to override a debt-ceiling increase by the deadline.”
Ms. Yellen and Ms. Mnuchin have both indicated that they would like to see the government negotiate a cap, including a haircut, in order to prevent a shutdown.
The shutdown deadline is January 19.