Debt ceiling deadline is now June 5, Janet Yellen says

Treasury Secretary Janet Yellen on Friday projected a new date for when the country will reach that point. Loan limit It’s June 5.

“Based on the most recently available data, we now estimate that if Congress does not raise or suspend the debt ceiling by June 5, the Treasury will have insufficient resources to meet the government’s obligations.” Wrote in a letter To Speaker of the House Kevin McCarthy.

Yellen’s new estimate has more specificity than her previous leadership. “By June 5,” he said in Friday’s letter, while his last two letters to Congress suggested somewhat more uncertainty — “as early as June 1” was the phrase he used. .

The exact time of the so-called “X-date,” when the U.S. will be unable to pay its bills, is subject to a degree of uncertainty, as the Treasury Department tracks money coming in and out of its coffers.

“We will make more than $130 billion in scheduled payments in the first two days of June, including payments to veterans and Social Security and Medicare recipients. These payments will leave the Treasury with extremely low levels of resources,” Yellen said. wrote

He noted that the Treasury Department is scheduled to make payments and transfers of about $92 billion in the week of June 5 and said the government will not have adequate resources to meet all its obligations.

The department has been using so-called extraordinary measures to help the government pay the bills since January — at which point Yellen urged lawmakers to act without delay. On Thursday, the Treasury took another step not used since 2015, swapping about $2 billion in Treasury securities between the Civil Service Retirement and Disability Fund and the Federal Financing Bank to help avoid a default.

“[T]”He calls for the lowest level of remaining resources to exhaust all available extraordinary measures to avoid the government failing to meet all of its commitments,” Yellen wrote.

Yellen told lawmakers that waiting until the last minute to reach a deal had pushed up borrowing costs for securities maturing as early as June.