Washington — Treasury Secretary Janet L. Yellen said on monday If Congress does not raise or suspend the debt ceiling, the U.S. could run out of money to pay the bill by June 1, prompting President Biden and lawmakers to reach an agreement to avoid default. I’m applying pressure.
Warnings about when the U.S. will reach its so-called X-date are a new imperative for Democrats and Republicans to raise the nation’s borrowing cap, shake financial markets and find ways to break the stalemate that threatens to topple the economy. provide sexuality.
“Given the current outlook, it is imperative that Congress act to raise or stop the debt limit as soon as possible in a way that provides long-term certainty that the government will continue to pay,” Yellen said. ‘ said.
House Republicans passed legislation in April that would raise the debt ceiling in exchange for significant spending cuts, while Democrats reversed recent legislation passed in line with their party line. Biden has lashed out at the bill, saying it will benefit the oil and gas industry while hurting working families and accusing Republicans of endangering the U.S. economy.
Still, with time running out and some moderate Democrats also calling for spending restraints, Mr. Biden is expected in the coming weeks to bolster California Republican House Speaker Kevin McCarthy and other members of Congress from both parties. I will be meeting with the instructor.
As the U.S. narrowly hit its $31.4 trillion debt ceiling in January, the Treasury Department announced a plan to allow the government to continue paying its bills, including payments to bondholders who own government debt. was forced to adopt an accounting operation known as special measures for Yellen said at the time that her powers to delay defaults (if the U.S. doesn’t pay on time) could be exhausted by early June. However, she cautioned that her estimates are fraught with considerable uncertainty.
Mr. Biden has scheduled a meeting with Mr. McCarthy, but has insisted that raising the debt ceiling is non-negotiable and has urged Republicans to do so without conditions.
“The most important thing we have to do in that regard is to make sure that the Speaker of the House threatens to default on the debt,” Biden said in a White House speech. “In over 200 years, America has never failed to pay its debts.”
A Treasury Department official said the government had a cash balance of about $300 billion at the end of April. It depends on whether the
Taxday payment is still coming. Goldman Sachs economists predicted last week that there could be about $60 billion in cash left in the Treasury by the second week of June, allowing the government to keep paying him through late July. was doing.
Some budget analysts have suggested that winter storms could complicate the Treasury Department’s ability to delay defaults. Severe storms, flooding, and landslides in California, Alabama, and Georgia this year caused the Internal Revenue Service to push back his April 18 filing deadline to October in dozens of counties.
The IRS also gave affected communities time to make contributions to retirement and health savings accounts, which could have an impact on taxable income.
Yellen has already taken steps to ensure that the federal government has enough cash on hand.
Earlier this year, she announced that she would be redeeming some of her existing investments and suspending new investments in the Civil Service Retirement and Disability Fund and the Postal Services Retirees Health Benefit Fund.
On Monday, Yellen said the Treasury Department was suspending the issuance of state and local government series Treasury bills.
The brinkmanship of the debt ceiling has reignited debate about how far the executive branch can avoid defaulting. But Yellen has dismissed his idea of prioritizing certain payments or minting $1 trillion worth of platinum his coin to help the US remain solvent.
Yellen warned in a speech last week that defaulting on debt would have serious economic consequences.
“Households are going to pay more for mortgages, auto loans, and credit card payments,” Yellen said during a speech at the Sacramento Metropolitan Chamber of Commerce. “And American businesses will face a worsening credit market.”
“Besides, it is unlikely that the federal government will be able to pay the millions of Americans, including military families and seniors who depend on Social Security.”
