Meet the Press - May 21, 2023
Interview
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Thanks so much, Chuck. It's a pleasure to be with you.
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Well, I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June, and possibly as soon as June 1st. And I will continue to update Congress, but I certainly haven't changed my assessment. So I think that that's a hard deadline.
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Well, Treasury has a long history of informing Congress about how much cash and headroom we have under the debt ceiling. And we take pride in the credibility of the forecasts that we make. I would point out that the Congressional Budget Office has recently indicated that they expect that early June will be a problem. And forecasters on Wall Street, who look at information daily on our cash balances and resources, agree. So there will be hard choices to make if the debt ceiling isn't raised. And, you know, I would simply say: Since 1789, the United States has a history of paying its bills on time. That's what the world wants to see, a continued commitment to do that. It's what underlies U.S. Treasury securities as the safest investment on the planet. And it's not an acceptable situation for us to be unable to pay our bills.
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Well, there's always uncertainty about tax receipts and spending. And so it's hard to be absolutely certain about this, but my assessment is that the odds of reaching June 15th, while being able to pay all of our bills, is quite low.
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Well, look, you know, the White House is negotiating in good faith with the Republicans to try to find a bipartisan solution. I don't want to negotiate in public and put down any red lines, but certainly, the president has pointed out, and it's important for the American people to understand, we're all concerned about deficits and fiscal responsibility, but deficits can be addressed both through changes in spending and also through changes in revenue, and the Republicans have taken that off the table. Something that greatly concerns me is that they have even been in favor of removing funding that's been provided to the Internal Revenue Service to crack down on tax fraud. We have an enormous gap between the taxes we're collecting and what we should be collecting, if everyone paid the taxes that they really owe. And that's really a reflection of tax fraud. It amounts to an estimated $7 trillion over the next decade. So equipping the IRS with the funding they need to audit high income individuals and corporations, that's something that doesn't cost money. It nets money substantially for the federal government. And, you know, of course, there are revenue proposals that we think make the tax code fairer.
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Well, "extraordinary measures" is used in a different way, but there has been --
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-- much discussion of the 14th Amendment. And, as President Biden said, I believe, this morning, it doesn't seem like something that could be appropriately used in these circumstances, given the legal uncertainty around it, and given the tight timeframe we're on. So my devout hope is that Congress will raise the debt ceiling --
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-- and we'll pay all of our bills.
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Well, we take the debt ceiling seriously as a constraint on our ability to pay bills that are coming due. And my assumption is that if the debt ceiling isn't raised, there will be hard choices to make about what bills go unpaid. And, you know, defaulting on any of our payments --
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Well, there will be some bill. We have to pay interest in principle on outstanding debt. We also have obligations to seniors who count on Social Security, our military that expects pay, contractors who've provided services to the federal government, and some bills have to go unpaid.
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Yes. And many people, including in the credit rating agencies --
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Look, I would say we're focused on raising the debt ceiling. And there will be hard choices if that doesn't occur. There can be no acceptable outcomes if the debt ceiling isn't raised, regardless of what decisions we make.
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Thanks.
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