Treasury Secretary Janet L. Yellen said on Monday that the United States could run out of money to pay its bills by June 1 if Congress does not raise or suspend the debt limit, putting pressure on President Biden and lawmakers to reach an agreement swiftly to avoid defaulting on the nation’s debt.
U.S. Treasury Secretary Janet Yellen said in a letter to Congress that the agency will be unlikely to meet all U.S. government payment obligations “by early June, and potentially as early as June 1” without action by Congress.
The new potential “X-date,” which takes into account April tax receipts, is largely unchanged from a previous estimate, issued in January, that the government could run short of cash around June 5. But Yellen also added some wiggle room.
“Federal receipts and outlays are inherently variable, and the actual date that Treasury exhausts extraordinary measures could be a number of weeks later than these estimates,” she wrote to lawmakers.
“It is impossible to predict with certainty the exact date when Treasury will be unable to pay the government’s bills, and I will continue to update Congress in the coming weeks as more information becomes available,” she wrote, urging Congress to act quickly to raise the limit.
After hitting the $31.4 trillion borrowing cap on Jan. 19, Treasury Secretary Janet Yellen previously told Congress Treasury would keep up payments on debt, federal benefits and make other outlays at using cash receipts and extraordinary cash management measures.
In 2011, a similar debt ceiling fight took the country to the brink of default and prompted a downgrade of the country’s top-notch credit rating. This time, negotiations may be even more difficult, veterans of 2011’s face-off say.