The calls come on the heels of Yellen’s message to Congress that the United States could default on its obligations as soon as June 1, if lawmakers don’t address the debt limit before then — an accelerated timeline that increased pressure on President Joe Biden and House Republican lawmakers to ramp up their talks.
A White House spokesperson said the protracted default scenario envisions a three-month long impasse. Even a brinksmanship scenario, where a default is avoided, would wipe out 200,000 jobs and knock 0.3 percentage points off annual gross domestic product, according to the Biden administration. In a short default, the economy would suffer the loss of about half a million jobs and the unemployment rate would rise by 0.3 percentage points, the economists said.