Treasury extends potential debt default deadline to June 5
(WASHINGTON) — Treasury Secretary Janet Yellen on Friday issued a new letter to Congress stating the government won’t begin to run out of money to pay its bills until June 5 — slightly later than the agency’s previous prediction of as soon as June 1.
“Based on the most recent available data, 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,” Yellen wrote.
The update buys much-needed time for negotiators to hammer out a deal to raise the debt limit and avoid a disastrous default. The so-called “X-date” has always been fluid, based on daily federal tax revenues and expenditures.
This letter comes as the Treasury Department’s cash reserves are running dangerously low.
New Treasury data shows its cash balance dwindled to just $39 billion at the end of the day yesterday. This is down from roughly $60 billion at the end of last week – and $316 billion at the start of the month.
The Treasury also released data showing it holds roughly $67 billion in “extraordinary measures” it can use.
In her letter, Yellen noted that more than $130 billion of payments are scheduled in the first two days of June, including to Veterans and Social Security and Medicare recipients.
“These payments will leave Treasury with an extremely low level of resources,” she wrote.
This is a developing story. Please check back for updates.
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