US Treasury Secretary Janet Yellen has been calling CEOs and business leaders to discuss the consequences of brinkmanship around the debt ceiling.
The calls come on the heels of Yellen's message to Congress that the US 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, CNN reported.
The Congressional Budget Office has also forecast that there is a "significantly greater risk that the Treasury will run out of funds in early June" because of weaker-than-expected tax collections.
In a report published last week, White House economists said that a protracted default would wipe out more than 8 million jobs and cut the value of the stock market in half.
The report estimated the impact under three scenarios: brinksmanship, a short default and a protracted default.
A White House spokesperson said the protracted default scenario envisions a three-month long impasse, CNN reported.
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.
Biden is set to meet all four congressional leaders -- Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Majority Leader Kevin McCarthy and House Minority Leader Hakeem Jeffries -- on Tuesday in hopes of avoiding potential default and catastrophic economic consequences less than a month from now.
The White House has said it will not negotiate over the debt ceiling, CNN reported.
