The US Secretary of the Treasury Janet Yellen issued another warning on Friday The US would default unless Congress reconsiders raising the $31.4 trillion debt ceiling by June 5.
What happened: The chief financial officer had previously said the federal government could do so potentially insolvent as early as June 1st However, he now cites June 5 as the exact date when Washington would run out of money to pay its bills.
“Based on the most recent data available, we now believe that unless Congress raises or suspends the debt limit by June 5, the Treasury Department will not have sufficient resources to meet government commitments,” Yellen wrote the heads of state and government.
Yellen said in a letter to Congress that her department will pay out more than $130 billion in planned payments to veterans, Social Security recipients and Medicare beneficiaries in the first two days of June.
“For the week of June 5, the Treasury Department is scheduled to process an estimated $92 billion in payments and remittances,” she said, adding, “As a result, our planned resources would not be sufficient to meet all of these commitments.”
Why it matters: The extension of the deadline offers additional time for White House and Congressional negotiators to reach a final agreement on increasing federal borrowing capacity.
In the meantime, President Joe Biden called an agreement to resolve the government’s debt ceiling The crisis seemed “very close” late Friday. “It’s very close and I’m optimistic,” Biden said as he headed to Camp David for Memorial Day weekend. reported The Washington Post.
also read: Peter Schiff says raising the debt ceiling won’t preserve America’s prosperity, but it will
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