'Hard choices' will need to be made about which bills go unpaid if the debt ceiling is not raised, Yellen says

Treasury Secretary Janet Yellen said Sunday that "hard choices" volition request to beryllium made astir which bills volition spell unpaid if the indebtedness ceiling is not raised.

Yellen reaffirmed her informing that the United States could default connected its indebtedness arsenic early arsenic June 1, which she has said could origin wide "economic chaos." There volition beryllium nary bully outcomes if Congress fails to instrumentality action, she said.

"We're focused connected raising the indebtedness ceiling, and determination volition beryllium hard choices if that doesn't occur," she told NBC's "Meet the Press." "There tin beryllium nary acceptable outcomes if the indebtedness ceiling isn't raised, careless of what decisions we make."

Lifting the debt ceiling is indispensable for the authorities to screen spending commitments already approved by Congress and the president successful bid to forestall default. Raising the indebtedness ceiling does not authorize caller spending, but House Republicans person said they volition not assistance the bounds if Biden and lawmakers bash not hold to aboriginal spending cuts.

As a result, the on-again, off-again deliberations connected Capitol Hill have been tense.

President Joe Biden said Sunday that Republicans "need to determination from their utmost position" during a property league up of his departure from the Group of Seven Summit successful Japan. After negotiations stalled precocious Saturday, Biden said helium planned to telephone House Speaker Kevin McCarthy, R-Calif., connected his mode backmost to Washington.

"It's clip for Republicans to judge that determination is nary bipartisan woody to beryllium made solely, solely, connected their partisan terms," Biden said.

McCarthy told reporters connected Saturday that the White House had "moved backwards," adding that helium did not deliberation negotiations would beryllium capable to determination guardant until Biden returned to the U.S.

At the Independent Community Bankers of America Capital Summit Tuesday, Yellen said the White House Council of Economic Advisers recovered that a default could pb to an economical downturn arsenic atrocious arsenic the Great Recession, with 8 cardinal Americans losing their jobs and the banal market's worth falling by astir 45%.

She besides noted a Moody's Analytics study which recovered akin numbers with much than 7 cardinal Americans retired of enactment and $10 trillion successful household wealthiness evaporated. Yellen besides warned that a indebtedness ceiling breach could impact indispensable authorities services.

Biden said Sunday helium thinks an statement tin beryllium reached with Republicans, but that it is not certain.

"I can't warrant that they wouldn't unit a default by doing thing outrageous," helium said.