Treasury Secretary Janet Yellen said Friday that if Congress does not address the debt ceiling by June 5, the U.S. Treasury Department will not have enough funds to pay all of the nation’s obligations in full and on time.
“Based on the most recent data available, we estimate that if Congress does not raise or suspend the debt ceiling by June 5, the Treasury will not have sufficient resources to meet the government’s obligations,” he said. wrote in a letter To House Speaker Kevin McCarthy and other congressional leaders.
The latest information comes as President Joe Biden and House Republicans continue to try Enter into an agreement to address the debt ceiling Before America defaults on its obligations wreaking havoc on the global economy and financial system. Negotiators are nearing an agreement, but there are several sticking points in the safety net plans, including the extent of cost cuts and expanding work requirements.
The new deadline gives the president and lawmakers a few more days to craft a package.
Until now, Yellen has been warning Congress that the so-called X-date, when the U.S. cannot meet all of its obligations, could come as early as June — and June 1. Earlier this week, he said. Lawmakers will try to provide a more precise date.
Some Republicans in Congress have questioned Yellen’s projections, particularly the June 1 deadline, saying she should have been more forthright in her projections.
The Treasury will send more than $130 billion in payments in the first two days of June, including to veterans and Social security and those with medical insurance. Yellen wrote that it would “carve out very limited resources” for the agency.
In the week of June 5, the Treasury is slated to make $92 billion in payments and transfers — but it is making clear it will not have the resources to meet these obligations, he continued.
As of Thursday, the agency had $38.8 billion in cash on hand, according to federal data. The The amount is rounded The Treasury takes in revenue and makes payments, but when coffers were relatively drained from tax collections in April, the balance was down from $238.5 billion at the start of the month.
The Treasury held about $67 billion as of Wednesday, up from $220 billion at the end of January.
Yellen’s new estimate is in line with forecasts from other groups Congressional Budget Office. Many have said that the X-date will drop in early June.
This story has been updated with additional information.