Yellen: Debt ceiling deadline is extended until June 5

First modification: 05/27/2023 – 04:21

The US Treasury Secretary, Janet Yellen, mentioned the new deadline to raise the federal debt limit, warning that the Government could enter the scenario of default if Congress does not increase the debt ceiling of 31.4 trillion dollars.

The new date is June 5, previously it had said that the default could occur on June 1. “We now estimate that the Treasury will not have sufficient resources to meet the government’s obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen wrote.

The so-called “X date” occurred when the Government was left without enough financial cushion to pay all its bills, after having exhausted the current period of “extraordinary measures” that began in January to stretch existing funds.

Yellen, by means of a letter, affirmed that the Treasury used one of those measures for the first time since 2015 to get the financial position of the United States to this point. “The extremely low level of remaining resources requires that you exhaust all available extraordinary measures to avoid being unable to meet all of the Government’s commitments,” he said in his letter.

“We have already seen Treasury borrowing costs rise substantially for securities maturing in early June,” the official added.

“If Congress does not increase the debt limit, it would cause serious hardship for American families, undermine our global leadership position, and raise questions about our ability to defend our national security interests,” he added.

President Joe Biden assured on Friday that “things are looking good” regarding the negotiations.

Republicans and the White House have been negotiating the debt limit for months. Republicans push for slash spending, but are met with fierce opposition from the Biden Administration.

with PA