Now the Treasury Secretary says the US could run out of money by June 5
Now Treasury Secretary says US could run out of money by JUNE 5: Confusion as Janet Yellen sets new default ‘x-date’ – giving negotiators longer to find a way to avoid economic collapse
- As White House and House GOP negotiators remain far apart on a deal, Janet Yellen’s new letter gives them a few extra days to reconcile their differences
- Yellen’s earlier warnings to Congress said the US could run out of money “as soon as” June 1.
- Now she says definitively that she believes Treasury funds “will dry up” by June 5
Treasury sec. Janet Yellen now says the federal government will run out of money to pay its bills on June 5, pushing back the date of possible default by four days.
“Based on the most recent data available, we now estimate that the Treasury will have insufficient funds to meet the government’s obligations if Congress does not increase or suspend the debt limit by June 5,” Yellen wrote in a letter Friday afternoon to the Congres.
As White House and House GOP negotiators remain far apart on a deal, this gives them a few extra days to reconcile their differences.
Yellen’s earlier warnings to Congress said US funds could run out “as soon as” June 1 — now she says definitively that she believes Treasury funds will dry up “on June 5.”
Yellen explained how she came to the conclusion:
“We will make more than $130 billion in scheduled payments in the first two days of June, including payments to veterans and Social Security and Medicare recipients. These payments will leave the Treasury with an extremely low level of resources.”
During the week of June 5, Treasury is expected to make an additional $92 billion in payments and remittances, including a regularly scheduled quarterly adjustment of an investment in Medicare and Social Security funds of approximately $36 billion. Therefore, our estimated resources would be insufficient to meet all these obligations.’
The secretary said the Treasury was using an “additional extraordinary measure” they’ve used in previous debt limit installments: swapping $2 billion in Treasury bills between the Civil Service Retirement and Disability Fund and the Federal Financing Bank.
She added that Treasury borrowing costs have already risen “significantly” for securities maturing in June, urging Congress to approve an increase “as soon as possible.”
Right-wing members had cast doubt on Yellen’s original June 1 warning, with some suggesting they subpoena the secretary to explain her suspicion.
‘5 June? Yellen said it was June 1 earlier this WEEK. Republicans will not be intimidated by her manipulation tactics,” Rep. Andy Biggs, R-Ariz., wrote on Twitter following the news.
“I don’t believe the first of the month is the real deadline,” said Rep. Matt Gaetz, R-Fla., to reporters ahead of Yellen’s latest letter. “Everyone knows this isn’t true,” said Rep. Ralph Norman, R.S.C.
Yellen couldn’t see inflation coming like an oncoming train. But she wanders out of a back room at the White House with a Ouija board… and tells us that the 1st of the month is the number,” said Rep. Chip Roy, R-Texas.
President Biden is going out of town this weekend to Camp David and Delaware with no deal in sight. Speaker Kevin McCarthy and his top negotiators – Rep. Garret Graves, La., and Patrick McHenry, N.C., sat back together at the Capitol on Friday — though they said the two sides were still far apart.