US Treasury Department says Congress must raise debt limit by June 5
WASHINGTON — Treasury Secretary Janet Yellen announced on Friday that the U.S. will run out of money to meet its commitments on June 5, giving President Joe Biden and Republican lawmakers more time to reach agreement on a budget agreement that will increase the debt ceiling lifts.
“Based on the most recent data available, we now believe that unless Congress raises or suspends the debt limit by June 5, the Treasury Department will not have sufficient resources to meet the government’s obligations,” Yellen wrote in a letter to Speaker of the House Kevin McCarthy (R-California).
Yellen previously warned that the Treasury Department would run out of money as early as June 1, putting extreme pressure on the Biden administration and McCarthy negotiators to negotiate a deal that includes the spending cuts Republican lawmakers are seeking.
Negotiations have made progress, but lawmakers are still undecided on several issues, including the amount of spending for the coming years and additional work requirements for some state safety-net programs.
“Democrats are currently willing to default on their debt so they can continue to provide welfare benefits to people who refuse to work,” Rep. Garret Graves (R-La.) claimed Friday.
When asked if Republicans would back down from that demand, Graves replied, “Damn no.”
Rep. Patrick McHenry (RN.C.), one of McCarthy’s negotiators, said a firm date would help, not hamper, the talks.
“Now we know, and that puts additional pressure on us to perform,” he told reporters at the Capitol. “It maintains the urgency and ensures it.”
“We are not finished yet. But we’re in the window to do that and we have to agree on some really tough conditions in this final stage.”
– Rep. Patrick McHenry (RN.C.)
McHenry indicated that talks were in the final stages, but noted that several issues remained to be resolved.
“It’s not over. We’re not done yet. But we’re in the window to do it and we have to agree on really tough conditions in this final stage,” he said.
On Thursday night, the New York Times reported that the White House is considering reclaiming $10 billion of last year’s $80 billion increase in IRS funding and using that money instead to help Republicans seek nondefense spending cuts to use.
In her Friday letter, Yellen warned that waiting until the last minute to raise the debt ceiling “could seriously damage business and consumer confidence, increase short-term borrowing costs for taxpayers, and adversely affect the creditworthiness of the United States.” ”
On Thursday, the rating agency Fitch assessed the creditworthiness of the United States Negative watch ratingand fires a shot across MPs’ bows as they struggle to reach an agreement.