Janet Yellen, US Treasury Secretary, speaks during the Independent Community Bankers Of America (ICBA) Capital Summit in Washington, DC, US, on Tuesday, May 16, 2023.

Nathan Howard | Bloomberg | Getty Images

Minister of Finance Janet Yellen said Sunday that “hard choices” will have to be made about which bills will remain unpaid if the debt ceiling is not raised.

Yellen reaffirmed her warning that the US could default on its debt as early on June 1which she has said can cause widespread “economic chaos“There will be no good results if Congress fails to take action,” she said.

“We are focused on raising the debt ceiling, and there will be tough choices if that doesn’t happen,” she told NBC’s “Meet the Press.” “There can be no acceptable results if the debt ceiling is not raised, no matter what decisions we make.”

To lift debt ceiling is necessary for the government to cover spending commitments already approved by Congress and the president to prevent default. Raising the debt ceiling does not allow for new spending, but House Republicans have said they will not lift the limit unless Biden and lawmakers agree to future cuts.

As a result of the deliberations on Capitol Hill has been tense.

President Joe Biden said on Sunday that the Republicans “must move from its extreme position” during a press conference ahead of his departure from the Group of Seven Summit in Japan. After negotiations stalled late Saturday, Biden said he planned to call the House speaker Kevin McCarthyR-Calif., heading back to Washington.

“It’s time for Republicans to accept that there is no bipartisan deal that can be made solely, solely, on their partisan terms,” ​​Biden said.

McCarthy told reporters on Saturday that the White House had “moved backwards” and added that he did not believe negotiations could move forward until Biden returned to the United States

At the Independent Community Bankers of America Capital Summit on Tuesday, Yellen said The White House Council of Economic Advisers found that a default could lead to an economic downturn as bad as the Great Recession, with 8 million Americans losing their jobs and the stock market falling by about 45%.

She also noted a Moody’s Analytics report that found similar numbers with more than 7 million Americans out of work and $10 trillion in household wealth lost. Yellen also warned that a breach of the debt ceiling could affect important government services.

Biden said Sunday that he believes a deal can be reached with Republicans, but that it is not certain.

“I can’t guarantee they wouldn’t force a standard by doing something outrageous,” he said.