Yellen has tried to stay out of the politics surrounding the debt limit, but Republicans have attacked her credibility. Members of the House Freedom Caucus recently wrote to leaders asking them to demand a full justification for her earlier forecast that the Treasury Department could run out of money as early as June 1.

Yellen has a lot at stake in these negotiations. She considered ways to contain fallout from a default as a Fed official during the last two major standoffs in 2011 and 2013.

1. Yellen? Warnings Went Unheeded

In the days after November’s elections, Yellen was feeling upbeat. She credited Democratic candidates with performing better than expected and having maintained control of the Senate. But as she traveled to a G-20 summit in Indonesia that month, she warned that Republicans taking the lead of the House posed a new threat to the economy.

Yellen was right, but her warnings went unheeded. The United States has since spent most of this year inching closer to a default as Republicans refused to raise the country’s $31.4 trillion borrowing limit without capping spending and rolling back President Biden?s agenda.

Treasury officials developed a default playbook during the last two debt limit standoffs in 2011 and 2013, and Yellen was a key participant in those discussions. She was briefed on the plans, and she engaged in her own contingency planning as a Fed official.

But she has been criticized by lawmakers for not being as forceful in expressing the consequences of a default. She has also been accused of being manipulative by members of the House Freedom Caucus, who recently wrote to Speaker Kevin McCarthy requesting that she “furnish a complete justification for her earlier projections that the U.S. could run out of money as early as June 1.” The White House has refused to say whether contingency plans are being considered, though former Treasury and Federal Reserve officials have said it’s nearly certain that emergency plans would be put in place if the deadline comes to pass.

2. Yellen?s Warnings Went Unheeded

Yellen is taking a behind-the-scenes role in the debt limit impasse, briefing lawmakers on the federal government’s cash reserves and calling business leaders to urge them to pressure Republicans to lift the borrowing cap. But many House Republicans aren’t buying her dire warnings about default, undercutting the urgency she has emphasized.

Despite the recent collapses of SVB Financial and Signature Bank, Yellen has assured depositors that their money is safe. She pledged a thorough review of what went wrong and promised to enact additional safeguards in the event that any further distress arises. But she also has warned that a prolonged shutdown of the banking system could have severe economic consequences, such as a possible bank run.

She also has adamantly opposed proposals that would allow the Treasury Department to prioritize certain bills over others in the event of a shutdown. White House officials have declined to say whether contingency planning is underway and Yellen has declined to offer specifics on how she might prioritize payments.

Yellen has stayed relatively quiet on inside-the-Beltway politics, but she has taken exception to President Trump’s repeated attacks on the Fed. She is concerned about his efforts to politicize the central bank, from his plans to nominate two allies to the Fed board to his Twitter tirades against the current chairwoman, Jerome Powell.

3. Yellen? Warnings Went Unheeded

The Treasury Department has developed a default playbook from previous debt limit standoffs in 2011 and 2013. And Yellen is very familiar with them: She was a top Federal Reserve official during the last two significant standoffs, contemplating how the central bank would try to contain fallout if the United States were to miss some payments.

Yellen is a strong proponent of reforming the rules that govern how the government can take on new borrowing, but she hasn't been at the forefront of the fight against the current impasse over the debt ceiling. Instead, she has taken a more behind the scenes role, briefing the White House on the nation's cash reserves, calling business leaders and asking them to urge Republicans to lift the debt limit and sending increasingly regular letters to Congress warning when the federal government will be unable to pay its bills.

Unlike some senior administration officials, Yellen has not participated in Oval Office meetings between President Biden and House Republicans. But she is coordinating on a daily basis with Jeffrey D. Zients, the White House chief of staff, and Lael Brainard, the director of the National Economic Council, to plot the administration's strategy.

Yellen has made clear that she won't accept any short-term solution that undermines the "full faith and credit" of the United States. She recently sent a letter to congressional leaders warning that if the government exhausts its extraordinary measures to avoid a default, it will be forced to prioritize principal and interest payments to bondholders while suspending the reinvestment of investments in the Civil Service Retirement and Disability Fund, the Postal Service Retiree Health Benefits Fund and the Federal Employees Retirement System Thrift Savings Plan.

4. Yellen? Warnings Went Unheeded

In the days following November’s midterm elections, Janet Yellen was upbeat that Democrats did better than expected and maintained control of the Senate. Now, the federal government’s cash balance has fallen below $40 billion and on Friday Yellen informed lawmakers that the X-date for when the Treasury Department runs out of money to pay bills on time will arrive by June 5.

The Federal Reserve chairwoman rarely talks about inside-the-Beltway politics but has become increasingly alarmed by President Trump’s efforts to politicize the central bank. Her scathing criticism of the President’s lack of understanding of basic macroeconomics has raised doubts about his ability to be a successful leader.

Yellen has also warned that the US could face widespread global effects if it exhausts its extraordinary measures and fails to raise the debt ceiling. She told CNN’s Christiane Amanpour on Friday that a default would damage the US’ reputation as a trusted global financial center and cause Americans to pay higher borrowing costs.

Amid the debt ceiling standoff, Yellen has been less vocal than her predecessors but has kept busy with contingency planning. She has briefed the White House on the nation’s cash reserves and has urged business leaders to pressure Republicans to compromise. She has also written increasingly regular letters to Congress warning when the United States will run out of money to pay its bills.