GOP grills Yellen over ‘X-date’ in first hearing since debt ceiling deal

Republicans grilled Treasury Secretary Janet Yellen on Tuesday over her role in the debt ceiling brinkmanship last month, in her first hearing before Congress since a deal was struck between President Biden and Speaker Kevin McCarthy (R-Calif.) last month.

House Financial Services Committee Vice-Chair French Hill (R-Ark.) set the tone at the start of the hearing, expressing his frustration with the lack of clarity around when the debt ceiling would be breached, or the “X-date.”

Rep. Ralph Norman (R-S.C.) followed up on the theme later in the hearing, which was largely focused on the state of the international financial system. 

“The debt limit moved from June 1 to June 5 and maybe in July, and we had a president who was missing in action for over 100 days [and] didn’t want to negotiate,” he said. 

“Did you not get with this administration to move the dates to ramp up the pressure?” 

Yellen responded with an “unambiguous no.” 

In early May, Yellen told lawmakers the U.S. would run out of funds in early June, and as soon as June 1 — in line with warnings she had issued in previous months. On May 26, she issued a more specific “X-date” of June 5. 

Biden and McCarthy ultimately reached a deal on May 28, which was passed on a bipartisan vote in the House on May 31 and the Senate on June 1. Republicans agreed to raise the debt ceiling in exchange for future spending caps and other concessions from Democrats.

Through the process, Yellen noted in her communications with lawmakers that it was impossible to predict with certainty when money would run out. However, Hill said on Tuesday that he remained frustrated with her lack of transparency. 

“At the end of February, Chairman [Patrick] McHenry [R-N.C.] wrote you requesting information and your projections and calculations, simple enough. The response was lacking, to put it mildly,” Hill said. 

Hill then claimed that Congress did not receive any communication from Yellen until May 1, which he noted was after the House GOP passed its initial debt ceiling bill on April 26. Soon thereafter, he said, two different X-dates were released with “zero explanation” and “zero transparency.”

Similarly, Rep. Bill Huizenga (R-Mich.) said Biden “ignored” McCarthy for nearly 100 days after he said they would negotiate. 

The “X-date” continued to be a point of contention throughout the hearing, with Yellen continually defending the timeline under which she released her predictions.

“There’s nothing political whatsoever about the information and advice that I have given to Congress about when our resources would be exhausted,” she said. 

Yellen added that in early January, she sent a letter to Congress indicating the Treasury’s concern that while they could pay the government’s bills until early June, resources may run out after that. And she said that proved to be accurate. 

“On June 2, the day after Congress raised the debt ceiling, the treasury balance declined to $23 billion which may sound like a lot of money but it’s completely insufficient,” Yellen said. 

Republicans and Democrats alike continued to give different perspectives as to what caused the debt ceiling negotiations to continue “right up to the line.” However, they did agree that no one wanted to default.

Yellen emphasized that waiting until the deadline to agree to raise the debt ceiling hurt the country’s credit rating in 2011, and that currently one rating agency has put the United States on negative credit watch.

“This cannot be normalized as the way we do business in Washington,” Yellen said. 

“Waiting until the last minute hurts our global leadership and credibility on the world stage. We are a nation that keeps our word and pays our bills and we should never give anyone any reason to think otherwise.”