Now Treasury Secretary says US could run out of money by JUNE 5: Confusion as Janet Yellen sets new default ‘x date’ – giving negotiators more time to find way out avoid economic collapse
- As White House and House GOP negotiators remain distant on a deal, Janet Yellen’s new letter gives them a few extra days to settle their differences
- Yellen’s previous warnings to Congress said the US ‘could run out of funds’ as soon as ‘June 1’
- Now she’s definitely saying she believes Treasury funds will ‘dry up’ by June 5
Dry Treasury. Janet Yellen now says the federal government could run out of money to pay its bills by June 5, pushing back the date of the potential default by four days.
“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 June 5. “Yellen wrote in a letter to Congress on Friday afternoon.
As White House and House GOP negotiators remain distant on a deal, it gives them a few extra days to resolve their differences.
Yellen’s previous warnings to Congress said the US ‘could run out of funds’ as early as June 1 – now she’s definitely saying she thinks Treasury funds will ‘run out’ by June 5 June.
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, the Treasury is expected to make an additional $92 billion in payments and transfers, including a regular quarterly adjustment of an investment in the Medicare and Social Security funds of approximately $36 billion. Therefore, our projected resources would be insufficient to meet all of these obligations.
The secretary said the Treasury used an “additional extraordinary measure” that it had used in previous episodes of debt limitation: swapping $2 billion of Treasury securities between the Pension and Disability Fund of the civil service and the Federal Finance Bank.
She added that Treasury borrowing costs had already increased “significantly” for securities maturing in June and urged Congress to pass an increase “as soon as possible.”
Members on the right had cast doubt on Yellen’s initial warning about June 1 – with some suggesting they subpoena the secretary to explain her preaching.
“June 5? Yellen said it was June 1 earlier this WEEK. Republicans will not be intimidated by his manipulation tactics,’ Rep. Andy Biggs, R-Arizona, wrote on Twitter after the news.
“I don’t believe the first of the month is the real deadline,” Rep. Matt Gaetz, R-Fla., told reporters before Yellen’s final letter. “Everyone knows that’s not true,” said Rep. Ralph Norman, RS.C.
‘Yellen couldn’t see inflation coming like an oncoming train. But she comes out of a back room in the White House with a Ouija board…telling us the 1st of the month is the number,’ Rep. Chip Roy, R-Texas, said.
President Biden is leaving town for the weekend at Camp David and Delaware with no deal in sight. Chairman Kevin McCarthy and his top negotiators — Rep. Garret Graves, Louisiana, and Patrick McHenry, North Carolina, met again on Capitol Hill on Friday — though they said the two sides were still far apart.
“I don’t know if it will be a day, two or three” before an agreement, McHenry told reporters on Friday.
“Every time there is more progress, the problems that remain become harder and harder.”
“At some point, this thing can come together — or go the other way.”
There were no sit-down meetings scheduled for Friday between House GOP negotiators and White House lawmakers — Shalanda Young and Steve Ricchetti.
Graves confirmed that he and Young briefly exchanged words at the White House for a celebration event for the Louisiana State University women’s basketball team.
“We spent some time talking about the kind of parameters and the current situation,” he said, adding that they hadn’t come any closer to an agreement.