WASHINGTON – Treasury Secretary Janet Yellen announced Friday that the US will run out of money to meet its obligations on June 5, giving the president Joe Biden and Republican lawmakers more time to agree on a budget deal that raises the debt ceiling.
“Based on the most recent data available, we now estimate that the Treasury will have insufficient resources to meet the government’s obligations if Congress does not raise or suspend the debt limit by June 5,” Yellen wrote in a statement. letter Addressed to House Speaker Kevin McCarthy (R-Calif.).
Yellen previously warned that the Treasury would run out of money as soon as June 1putting the Biden administration and McCarthy negotiators under extreme pressure to finish reaching a deal that includes the spending cuts sought by Republican lawmakers.
Negotiations have progressed, but lawmakers are still concerned about a number of issues, including spending levels for the next few years and additional work requirements for some federal safety net programs.
“democrats right now they are willing to stop paying the debt so they can continue to make welfare payments for people who refuse to work,” Rep. Garret Graves (R-La.) said Friday.
Wonder if republicans would withdraw from that lawsuit, Graves replied, “Hell no.”
Rep. Patrick McHenry (RN.C.), one of McCarthy’s negotiators, said having a firm date would help, not hinder, the talks.
“Now we know and this puts additional pressure on us to act,” he told reporters on Capitol Hill. “Maintains and ensures urgency.”
“We are not done. But we are within the window of being able to do this, and we have to come to some really difficult terms in these closing hours.”
– Representative Patrick McHenry (RN.C.)
McHenry offered a hint that the talks were in their final stages, even as he warned that several issues remained to be resolved.
“It’s not over. We’re not over. But we’re within the window of being able to do this, and we have to come to some really tough terms in these closing hours,” he said.
On Thursday night, The New York Times reported The White House was considering taking back $10 billion of an $80 billion increase in IRS funding won last year and instead using that money to ease non-defense spending cuts sought by Republicans.
In her letter on Friday, Yellen warned that waiting until the last minute to raise the debt ceiling could cause “serious damage to business and consumer confidence, increase short-term borrowing costs for taxpayers, and impact negatively on the credit rating of the United States. ”
On Thursday, the Fitch credit rating agency placed US credit in rating view negativefiring a shot at legislators as they struggle to reach an agreement.