Treasury Secretary Janet Yellen said Friday the projected debt ceiling deadline is extended to June 5, four days later than previously estimated.
Yet, Yellen renewed her warning in a letter to Congress that inaction on raising the borrowing limit would "cause severe hardship."
Yellen's latest letter to legislators on the "X-date" came as Congress broke for the long Memorial Day weekend. She said that the Treasury Department had deployed an extraordinary measure not used since 2015 to get the U.S. financial position to this point.
FILE - U.S. Treasury Secretary Janet Yellen takes questions from journalists during a press conference, at the G7 meeting of Finance Ministers and Central Bank Governors, at Toki Messe in Niigata, Japan, Thursday, May 11, 2023. (AP Photo/Shuji Kajiyama, Pool, File)
Shuji Kajiyama
The X-date arrives when the government no longer has enough of a financial cushion to pay all its bills, having exhausted the measures it's been using since January to stretch existing funds.
Earlier Friday, House Speaker Kevin McCarthy said his Republican debt negotiators and the White House had hit "crunch" time, straining to wrap up an agreement with President Joe Biden to curb federal spending and lift the nation's borrowing limit ahead of the fast-coming deadline.
They had hoped to end weeks of frustrating talks and strike a deal by this weekend. Treasury now says the government could start running out of money as soon as a week from Monday, sending the U.S. into a potentially catastrophic default with economic spillover around the world.
Anxious retirees and social service groups were among those making default contingency plans as lawmakers left town for the long holiday weekend. The next batch of Social Security checks are due to go out next week.
"The world is watching," said International Monetary Fund Managing Director Kristalina Georgieva after meeting Friday with Yellen. "Let's remember we are now in the 12th hour."
Democrat Biden and the Republican speaker were narrowing differences, laboring to lock in details on a two-year agreement that would restrain federal spending and lift the legal borrowing limit past next year's presidential election.
Any deal would need to be a political compromise, with support from both Democrats and Republicans to pass the divided Congress.
"We know it's a crunch," McCarthy said as he arrived at the emptied out Capitol, acknowledging more progress needed to be made.
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Debt ceiling deadline is extended to June 5, later than previously estimated, Yellen says
In remarks at the White House honoring the Louisiana State University champion women's basketball team, Biden gave a shoutout to one of this top negotiators saying she's "putting together a deal, hopefully."
He was referring to Office of Management and Budget Director Shalanda Young who attended the event as did Rep. Garret Graves of Louisiana, a top Republican negotiator.
While the contours of the deal have been taking shape to cut spending for 2024 and impose a 1% cap on spending growth for 2025, the two sides remain stuck on various provisions. The debt ceiling, now at $31 trillion, would be lifted for two years to pay the nation's incurred bills.
A person familiar with the talks said the two sides were "dug in" on whether or not to agree to Republican demands to impose stiffer work requirements on people who receive government food stamps, cash assistance and health care aid.
House Democrats have called such requirements for health care and food aid a nonstarter.
Asked if Republicans would relent on work requirements Graves, fumed: "Hell no, not a chance."
House Republicans have pushed the issue to the brink, displaying risky political bravado in leaving town for the Memorial Day holiday. Lawmakers are tentatively not expected back at work until Tuesday, just two days from the June 1 "X-date" when Treasury Secretary Yellen has said the U.S. could face default.
Biden will also be away this weekend, departing Friday for the presidential retreat at Camp David, Maryland, and Sunday for his home in Wilmington, Delaware. The Senate is on recess and will return after Memorial Day.
"Each time there is forward progress, the issues that remain become more difficult and more challen
ging," said negotiator Rep. Patrick McHenry, R-N.C., at midday Friday.
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Yet, Yellen renewed her warning in a letter to Congress that inaction on raising the borrowing limit would "cause severe hardship."
Yellen's latest letter to legislators on the "X-date" came as Congress broke for the long Memorial Day weekend. She said that the Treasury Department had deployed an extraordinary measure not used since 2015 to get the U.S. financial position to this point.
FILE - U.S. Treasury Secretary Janet Yellen takes questions from journalists during a press conference, at the G7 meeting of Finance Ministers and Central Bank Governors, at Toki Messe in Niigata, Japan, Thursday, May 11, 2023. (AP Photo/Shuji Kajiyama, Pool, File)
Shuji Kajiyama
The X-date arrives when the government no longer has enough of a financial cushion to pay all its bills, having exhausted the measures it's been using since January to stretch existing funds.
Earlier Friday, House Speaker Kevin McCarthy said his Republican debt negotiators and the White House had hit "crunch" time, straining to wrap up an agreement with President Joe Biden to curb federal spending and lift the nation's borrowing limit ahead of the fast-coming deadline.
They had hoped to end weeks of frustrating talks and strike a deal by this weekend. Treasury now says the government could start running out of money as soon as a week from Monday, sending the U.S. into a potentially catastrophic default with economic spillover around the world.
Anxious retirees and social service groups were among those making default contingency plans as lawmakers left town for the long holiday weekend. The next batch of Social Security checks are due to go out next week.
"The world is watching," said International Monetary Fund Managing Director Kristalina Georgieva after meeting Friday with Yellen. "Let's remember we are now in the 12th hour."
Democrat Biden and the Republican speaker were narrowing differences, laboring to lock in details on a two-year agreement that would restrain federal spending and lift the legal borrowing limit past next year's presidential election.
Any deal would need to be a political compromise, with support from both Democrats and Republicans to pass the divided Congress.
"We know it's a crunch," McCarthy said as he arrived at the emptied out Capitol, acknowledging more progress needed to be made.
Listen now and subscribe: Apple Podcasts | Google Podcasts | Spotify | RSS Feed | Omny Studio | All Of Our Podcasts
Debt ceiling deadline is extended to June 5, later than previously estimated, Yellen says
In remarks at the White House honoring the Louisiana State University champion women's basketball team, Biden gave a shoutout to one of this top negotiators saying she's "putting together a deal, hopefully."
He was referring to Office of Management and Budget Director Shalanda Young who attended the event as did Rep. Garret Graves of Louisiana, a top Republican negotiator.
While the contours of the deal have been taking shape to cut spending for 2024 and impose a 1% cap on spending growth for 2025, the two sides remain stuck on various provisions. The debt ceiling, now at $31 trillion, would be lifted for two years to pay the nation's incurred bills.
A person familiar with the talks said the two sides were "dug in" on whether or not to agree to Republican demands to impose stiffer work requirements on people who receive government food stamps, cash assistance and health care aid.
House Democrats have called such requirements for health care and food aid a nonstarter.
Asked if Republicans would relent on work requirements Graves, fumed: "Hell no, not a chance."
House Republicans have pushed the issue to the brink, displaying risky political bravado in leaving town for the Memorial Day holiday. Lawmakers are tentatively not expected back at work until Tuesday, just two days from the June 1 "X-date" when Treasury Secretary Yellen has said the U.S. could face default.
Biden will also be away this weekend, departing Friday for the presidential retreat at Camp David, Maryland, and Sunday for his home in Wilmington, Delaware. The Senate is on recess and will return after Memorial Day.
"Each time there is forward progress, the issues that remain become more difficult and more challen
ging," said negotiator Rep. Patrick McHenry, R-N.C., at midday Friday.
Debt ceiling deadline is extended to June 5, later than previously estimated, Yellen says
Treasury Secretary Janet Yellen said in a letter Friday to Congress that inaction on raising the borrowing limit would “cause severe hardship.”
