Yellen Expects U.S. to Run Out of Cash by June 5 as Debt Talks Continue

Treasury Secretary Janet L. Yellen said on Friday that the United States will run out of money to pay its bills on time by June 5, moving the goal posts back slightly while maintaining the urgency for congressional leaders to reach a deal to raise or suspend the debt limit.

The letter provided the most precise date yet for when the United States is expected to run out of cash. Ms. Yellen had previously said the United States could hit the so-called X-date — the moment when it does not have enough money to pay all of its bills on time — as soon as June 1.

While the letter to lawmakers provides a tiny bit of wiggle room, it also makes clear the dire financial situation that Treasury is facing. The federal government is required to make more than $130 billion in scheduled payments during the first two days of June — including money to veterans and Social Security and Medicare recipients.

Those payments will leave the Treasury Department with “an extremely low level of resources.” Ms. Yellen went on to detail billions of dollars of required cash transfers, expenditures and investments in programs such as the Social Security and Medicare trust funds that will further deplete its cash reserves.

“Our projected resources would be inadequate to satisfy all of these obligations,” Ms. Yellen wrote.

Ms. Yellen’s letter comes as the White House and House Republicans have been racing to reach a deal that would lift the nation’s $31.4 trillion borrowing cap and prevent the United States from defaulting on its debt. The Treasury Department hit its statutory debt limit on Jan. 19 and has been employing accounting maneuvers — known as “extraordinary measures” — to ensure the United States can continue paying its bills on time since it cannot add to the nation’s outstanding debt load.

Representative Patrick T. McHenry, a North Carolina Republican who is a key player in the talks, said the Treasury Department’s more precise date “puts additional pressure on us.”

Even before the letter was sent, Mr. McHenry said he was cognizant of how little time remained to prevent a default.

“We’ve got to be in the closing hours because of the timeline,” he said. “I don’t know if it’s in the next day or two or three, but it’s got to come together.”

For months, Ms. Yellen has been warning lawmakers that the United States could run out of cash to pay all of its bills on time in early June.

Ms. Yellen said earlier this week that she would try to include more precision in her future updates about when a default might occur. Some House Republicans have expressed doubt that a default could be approaching so quickly, and they have called on the Treasury secretary to appear before Congress and present her full analysis.

Earlier this week, members of the House Freedom Caucus, a group of conservative Republicans, wrote a letter to Speaker Kevin McCarthy, Republican of California, urging party leaders to demand that Ms. Yellen “furnish a complete justification” of her projection that the United States could run out of cash as soon as June 1. They accused Ms. Yellen of “manipulative timing” and suggested that her forecasts should not be trusted because she was wrong about how hot inflation would get.

Other independent analyses have also pegged early June as the most likely moment when the United States will hit the X-date. The Bipartisan Policy Center said earlier this week that the U.S. faced an “elevated risk” of running out of cash to pay its bills between June 2 and 13 if Congress does not raise or suspend the nation’s debt limit.

While negotiators have been in round-the-clock talks, no deal has yet been announced. Still, the contours of an agreement between the White House and Republicans are taking shape. That deal would raise the debt limit for two years while imposing strict caps on discretionary spending not related to the military or veterans for the same period.

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