Treasury Secretary Janet Yellen said Congress must raise the $31.4 trillion debt ceiling by June 5, or the US will default.
Yellen had predicted a default on June 1 but now says June 5 is the deadline.
“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,” she said.
The more accurate assessment gives White House and congressional negotiators more time to reach a compromise to boost the federal borrowing limit.
Democratic and Republican negotiators were close to a compromise on Friday but struggled to address contentious issues.
In a letter to Congress, Yellen said her department would pay veterans, Social Security, and Medicare recipients more than $130 billion in the first two days of June.
“During the week of June 5, Treasury is scheduled to make an estimated $92 billion of payments and transfers,” including a $36 billion quarterly adjustment to Social Security and Medicare trust funds, Yellen said.
“Therefore, our projected resources would be inadequate to satisfy all of these obligations,” she stated.
Yellen also said the department swapped $2 billion of Treasury securities between the Civil Service Retirement and Disability Fund and the Federal Financing Bank on Thursday to avoid a default. However, she claimed the measure was last utilized in 2015.
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