Now Treasury Secretary says US could run out of money by JUNE 5: Confusion as Janet Yellen sets new default ‘x-date’ – giving negotiators longer to find a way to avoid economic collapse
Treasury sec. Janet Yellen now says the federal government will run out of money to pay its bills on June 5, pushing back the date of potential default by four days.
“Based on the most recent data available, we now estimate that the Treasury will have insufficient funds to meet the government’s obligations if Congress does not increase or suspend the debt limit by June 5,” Yellen wrote in a letter Friday afternoon to the Congres.
Since the White House and House GOP negotiators remain far apart on a deal, this gives them a few extra days to resolve their differences.
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, Treasury is expected to make an additional $92 billion in payments and remittances, including a regularly scheduled quarterly adjustment of an investment in Medicare and Social Security funds of approximately $36 billion. Therefore, our estimated resources would be insufficient to meet all these obligations.’
The secretary said the Treasury was using an “additional extraordinary measure” they’ve used in past debt limit installments: swapping $2 billion in Treasury bills between the Civil Service Pension and Disability Fund and the Federal Financing Bank.
She added that Treasury borrowing costs have already risen “significantly” for securities maturing in June and urged Congress to approve an increase “as soon as possible.”