Treasury Secretary Janet L. Yellen said on Friday that the United States will run out of money to pay its bills on time by June 5, moving the goal posts back slightly while maintaining the urgency for congressional leaders to reach a deal to raise or suspend the debt limit.
The letter provided the most precise date yet for when the United States is expected to run out of cash. Ms. Yellen had previously said the United States could hit the so-called X-date — the moment when it does not have enough money to pay all of its bills on time — as soon as June 1.
While the letter to lawmakers provides a tiny bit of wiggle room, it also makes clear the dire financial situation that Treasury is facing. The federal government is required to make more than $130 billion in scheduled payments during the first two days of June — including money to veterans and Social Security and Medicare recipients.
Those payments will leave the Treasury Department with “an extremely low level of resources.” Ms. Yellen went on to detail billions of dollars of required cash transfers, expenditures and investments in programs such as the Social Security and Medicare trust funds that will further deplete its cash reserves.
“Our projected resources would be inadequate to satisfy all of these obligations,” Ms. Yellen wrote.
Ms. Yellen’s letter comes as the White House and House Republicans have been racing to reach a deal that would lift the nation’s $31.4 trillion borrowing cap and prevent the United States from defaulting on its debt. The Treasury Department hit its statutory debt limit on Jan. 19 and has been employing accounting maneuvers — known as “extraordinary measures” — to ensure the United States can continue paying its bills on time since it cannot add to the nation’s outstanding debt load.
Representative Patrick T. McHenry, a North Carolina Republican who is a key player in the talks, said the Treasury Department’s more precise date “puts additional pressure…