US Treasury says Congress must raise debt ceiling by June 5

WASHINGTON — Treasury Secretary Janet Yellen announced Friday that the United States will run out of money to meet its obligations on June 5, giving President Joe Biden and Republican lawmakers more time to reach agreement on a budget deal that will raises the debt ceiling.

“Based on the most recent data available, we now estimate that the Treasury will not have sufficient resources to meet the government’s obligations if Congress does not raise or suspend the debt ceiling by the 5 June,” Yellen wrote in a statement. letter addressed to House Speaker Kevin McCarthy (R-Calif.).

Yellen previously warned the Treasury would run out of cash as early as June 1, putting the Biden administration and McCarthy negotiators under extreme pressure to finish a deal that includes spending cuts sought by GOP lawmakers. .

Negotiations have progressed, but lawmakers are still stuck on several issues, including spending levels for future years and additional work requirements for some federal backstop programs.

“Democrats are currently prepared to default on debt so they can continue to pay welfare benefits to people who refuse to work,” Rep. Garret Graves (R-La.) said Friday.

When asked if Republicans would back down on that demand, 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 that puts extra pressure on us to perform,” he told reporters on Capitol Hill. “He maintains and ensures urgency.”

We haven’t finished. But we are in the window of being able to do so, and we have to come to very difficult conditions in these closing hours.Representative Patrick McHenry (RN.C.)

McHenry hinted that the talks were in their final stages, although he warned that several issues had yet to be resolved.

“It’s not over. We’re not finished. But we’re within the window of being able to do that, and we have to come to very difficult terms in these closing hours,” he said. -he declares.

On Thursday night, The New York Times reported that the White House plans to claw back $10 billion of an $80 billion increase in IRS funding earned last year and instead use that money to facilitate cuts. of non-military spending sought by Republicans.

In his letter on Friday, Yellen warned that waiting until the last minute to raise the debt ceiling can “seriously damage business and consumer confidence, increase short-term borrowing costs for taxpayers and negatively impact the credit rating of the United States. ”

On Thursday, credit rating agency Fitch placed U.S. credit on negative watch, firing a shot through the bow of lawmakers as they scramble to reach a deal.


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