Treasury Secretary Janet Yellen on Friday said the estimated deadline for the federal debt ceiling would come four days later than was first warned.
In a new letter to congressional leaders, Yellen said the Treasury was now forecast to run out of funds on Monday, June 5.
“Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the governments obligations if Congress has not raised or suspended the debt limit by June 5,” Yellen wrote.
Previous letters had said the Treasury might run out of funds as early as June 1.
Yellen repeated word for word her earlier warning to congress that waiting until the last minute to strike any deal could increase harm and costs for consumers and businesses nationwide.
“If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” Yellen wrote.
The shift in deadline is likely to add turbulence to closely followed talks between President Joe Biden and House Speaker Kevin McCarthy, who have spent the last days working out a compromise framework in repeated, on-and-off meetings.
Broadly, a deal is expected to involve spending cuts in 2024 and a percentage cap on spending growth starting in 2025.
Other provisions remain a sticking point, such as Republican demands that government food stamps and other financial aid come with stiffer work requirements.
Any deal is likely to involve elements of compromise, if it is to get bipartisan support to move through Congress.
President Biden sounded upbeat on the promise of a deal as he left for Camp David.
“Its very close, and Im optimistic,” he said.
Lawmakers, meanwhile, have left the Capitol for the Memorial Day holiday. Congressional leadership has warned them that they should be ready to return on 24 hours’ notice in case negotiators strike a deal on the debt limit.
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