Treasury Secretary Yellen said that if the debt ceiling is not raised, the US will default on June 5, later than the previously predicted June 1.
"Based on recent data, we now estimate that the Treasury will not have sufficient funds to carry out the government's duties if Congress does not raise the debt ceiling by June 5," US Treasury Secretary Janet Yellen wrote to US House Speaker Kevin McCarthy on May 26.
Ms. Yellen's forecast of a US default is a few days later than the previous estimate of June 1. This could give negotiators of President Joe Biden's administration and congressional leaders a few more days to negotiate the public debt ceiling.
US Treasury Secretary Janet Yellen in Washington in June 2021. Photo: Reuters
"Thanks to additional revenue and expenditure data, the Treasury now has a more specific estimate of the June 5 default date," said Lael Brainard, director of the US National Economic Council.
Congressman Garret Graves, who played a key role in the negotiations, said on the same day that proposed changes to some federal aid programs remained a "major sticking point," preventing the White House and Republicans from reaching a deal to raise the debt ceiling.
The US hit its $31.4 trillion debt ceiling set by Congress in January, forcing the Treasury Department to take “extraordinary measures” to continue funding the government while President Biden and congressional leaders agree to raise the debt ceiling.
The parties have held many rounds of negotiations to raise the debt ceiling, avoiding the US government's bankruptcy, but no progress has been made.
Republicans want the US government to cut spending drastically to raise the debt ceiling, but President Biden rejected it, accusing the Republicans of pushing the world's number one economy to the brink of bankruptcy to serve their own goals.
However, the White House owner confidently declared on May 25 that the US will avoid a debt default scenario in the context of negotiations between the White House and Congress "having been effective".
Ngoc Anh (According to Hill/AFP )
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