Debt ceilling: Yellen tells Congress US might run out of cash to pay all its payments by June 5
By FATIMA HUSSEIN
WASHINGTON — Treasury Secretary Janet Yellen advised Congress on Friday that the U.S. might default on its debt obligations by June 5 — 4 days later than beforehand estimated — if lawmakers don’t act in time to lift the federal debt ceiling.
Yellen’s letter comes as Congress breaks for an extended Memorial Day weekend, and tensions construct over whether or not a deal between the White Home and Republicans in Congress will probably be struck in time.
The so-called “X-date” arrives when the federal government not has sufficient of a monetary cushion to pay all its payments, having exhausted the “extraordinary measures” it has been using since January to stretch current funds.
Yellen stated in her letter that the company used one such measure for the primary time since 2015 to get the U.S. monetary place so far: a swap of roughly $2 billion in Treasury securities between the Civil Service Retirement and Incapacity Fund and the Federal Financing Financial institution.
“The extraordinarily low stage of remaining assets calls for that I exhaust all accessible extraordinary measures to keep away from being unable to fulfill all the authorities’s commitments,” she stated in her letter.
“We’ve already seen Treasury’s borrowing prices enhance considerably for securities maturing in early June,” she stated.
“If Congress fails to extend the debt restrict, it might trigger extreme hardship to American households, hurt our world management place, and lift questions on our means to defend our nationwide safety pursuits,” she stated.
The most recent projection is consistent with her earlier estimations that the U.S. might exhaust all extraordinary measures in early June and as quickly as June 1, however the newest deadline affords lawmakers and the White Home extra time to strike a deal.