WASHINGTON − The U.S. has an extra four days to avoid defaulting on its debt.
Treasury Secretary Janet Yellen Friday provided an updated timeline for when the government could run out of money, saying her projection is now June 5.
“Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen said in a letter to House Speaker Kevin McCarthy.
Yellen had previously said the U.S. is on track to default in early June and “as early as June 1,” which had White House and Republican negotiators targeting the first of the month for a deal.
The more precise projection gives President Joe Biden and McCarthy additional time to strike a deal to raise the debt ceiling as they head into Memorial Day weekend.
The two sides are nearing a new deal to raise the debt ceiling through 2024 and cut spending but they still have disagreements on expanded work requirements for welfare programs and expedited permitting for oil and gas projects.
Yellen said the Treasury is set to make more than $130 billion of scheduled payments in the first two days of June including payments to veterans and Social Security and Medicare recipients, leaving the department with “an extremely low level of resources.”
She said the government’s balance would be inadequate to satisfy an estimated $92 billion of payments and transfers, including a regularly scheduled quarterly adjustment that would result in an investment in the Social Security and Medicare trust funds of roughly $36 billion.
Yellen urged Congress to take action to raise the debt ceiling, saying it would “cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”
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Yellen warned of June 5 date in January letter to McCarthy
This isn’t the first time Yellen has referenced a June 5 date.
The Treasury secretary sent a letter to House Speaker Kevin McCarthy, R-Calif., earlier this year warning that a “debt issuance suspension period” could last through June 5 before the Treasury exceeds the debt limit.
The Treasury Department in January announced it would start taking “extraordinary measures” to prevent the country from defaulting on its debt obligations.
“The period of time that extraordinary measures may last is subject to considerable uncertainty due to a variety of factors, including the challenges of forecasting the payments and receipts of the U.S. government months into the future,” Yellen wrote in January.
More:Debt ceiling talks ‘still far apart’ as Republicans balk at giving any concessions to Democrats
Where do negotiations stand?
White House Press Secretary Karine Jean-Pierre said Thursday White House negotiators have had “productive discussions” with Republicans. She added that the only path forward is bipartisan legislation.
More:U.S. Treasury Department to take ‘extraordinary measures’ as government nears debt ceiling
Contributing: Joey Garrison, Marina Pitofsky
