Treasury Secretary Janet Yellen on Friday estimated the new date when the country will reach the debt ceiling is June 5.
“Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” she wrote in a letter to House Speaker Kevin McCarthy.
Yellen’s new estimate contains more specificity than her earlier guidance. “By June 5,” she said in Friday’s letter, whereas her last two letters to Congress suggested a little more uncertainty — “as early as June 1” was the phrasing she used.
The exact timing of the so-called “X-date,” when the U.S. will not be able to pay its bills, has a degree of uncertainty, as the Treasury Department tracks money coming into and leaving its coffers.
“We will make more than $130 billion of scheduled payments in the first two days of June, including payments to veterans and Social Security and Medicare recipients. These payments will leave Treasury with an extremely low level of resources,” Yellen wrote.
She noted the Treasury Department is scheduled to make an estimated $92 billion in payments and transfers the week of June 5 and said the government would not have adequate resources to satisfy all of its obligations.
The department has been using so-called extraordinary measures to help the government pay the bills since January – at which time Yellen urged lawmakers to act without delay. On Thursday, the treasury took another measure not used since 2015, swapping about $2 billion in Treasury securities between the Civil Service Retirement and Disability Fund and the Federal Financing Bank in an effort to help avoid default.
“[T]he extremely low level of remaining resources demands that I exhaust all available extraordinary measures to avoid being unable to meet all of the government’s commitments,” Yellen wrote.
Yellen told lawmakers that waiting until the last minute to reach a deal has already caused borrowing costs to go up for securities maturing in early June.
Rep. Patrick McHenry, one of the GOP negotiators, said the June 5 date “maintains and ensures the urgency” of reaching a deal.
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