Yellen Warns Treasury to Run Out of Funds June 5, Urges Deal ‘As Soon As Possible’

Treasury Secretary Janet Yellen announced on Friday that the government could top the debt ceiling on June 5 if the White House and Congress do not reach a deal by then to raise or suspend the ceiling.

Yellen warned last week that the deadline would be “very likely” early June, or as early as June 1, as tense negotiations continued in Washington, and did not provide a specific deadline. clarified.

Yellen wrote to House Speaker Kevin McCarthy (Republican, Calif.), “If Congress does not raise or suspend the debt ceiling by June 5, based on the latest available data, the Treasury Department will We estimate that we do not have sufficient funds to meet our government obligations,” it said in a letter. .

With the so-called X-date looming, Mr. McCarthy, President Joe Biden and their surrogate negotiators have been locked in negotiations for days.

House Republicans passed a package in April that would raise the debt ceiling until early next year in exchange for significant spending cuts and other concessions. continue to demand aspects of He ruled the Senate.

Republicans heavily involved in the debate, including Rep. Patrick McHenry (R.N.C.) and Garrett Graves (R.N.C.) and Reps. I was in and out of Mr. McCarthy’s office until Friday night, the Memorial Day weekend, when I was leaving because of this. .

Rep. Patrick McHenry speaks to reporters about the status of ongoing debt ceiling negotiations before entering House Speaker Kevin McCarthy’s office on May 26, 2023 (Breitbart News)

Financial Services Commission Chairman McHenry told reporters on his way to the chairman’s office on Friday night that there were “significant challenges ahead” and that a deal would be “whether it happens within hours or within days. I don’t know if that means reaching an agreement.”

Mr. Biden and Senate Majority Leader Chuck Schumer (D., N.Y.) have spent months on no terms other than passing a “clean” debt ceiling hike, that is, a bill that raises it to the ceiling without any of the terms the Republicans want. has refused to settle.

After Republicans in the House showed that even a narrow majority could unite the conference around the plan, Mr. Biden went to talks with Mr. McCarthy about spending cuts, even though the president had said he would not move on the issue for months. We were forced to start negotiations.

Amid mounting pressure for a resolution against them, McCarthy vowed to comply with House rules and give his colleagues three days to consider the details of the debt package if it is finalized.

Yellen initially warned that the deadline could be June 1, and coupled with the vetting process and other congressional proceedings, it looks like the time constraints are becoming increasingly difficult for lawmakers and Biden. rice field.

But with the president leaving for Delaware on vacation at the end of the year weekend and Yellen setting a firm schedule of at least 10 days ahead, the pressure appears to have eased somewhat.

Some Republicans, especially House Liberals like Rep. Andy Biggs (R-Arizona), defendant Although Yellen claimed to have engaged in “manipulative tactics” following the latest announcement, McHenry didn’t take issue with Yellen’s date on Friday.

Analysts such as Jim Bianco suggest that Yellen has acted conservatively. pointing Bond market prices indicate that the deadline could be several days or even a week later than June 5.

In her letter to McCarthy, Yellen reiterated that catastrophic events could ensue if nations begin to approach default.

“Wait until the last minute to suspend or raise the debt ceiling would severely damage business and consumer confidence, raise short-term borrowing costs for taxpayers, and harm U.S. credit ratings,” Yellen said. It can be given,” he said.

“I will continue to urge Congress to protect America’s trust and credibility by acting as soon as possible,” he added.

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