Kopar Khairane

Treasury fears the US might run out of money by June 1; Biden summons a conference to discuss the debt limit

U.S. Treasury Secretary Janet L. Yellen has alerted Congress that by June 1, the nation could not have enough money to cover its obligations.
Yellen said that if Congress does not increase or suspend the debt ceiling before that time in a letter to members of the Congressional leadership over the debt limit, the US would not be able to continue to meet all of the government's commitments by early June, and perhaps as early as June 1. To discuss lifting the country's borrowing ceiling, President Biden has invited House Speaker Kevin McCarthy to the White House. According to the New York Post, the meeting is scheduled for May 9.
According to a statement from the White House, McCarthy, who was in Jerusalem on Monday to mark Israel's 75th anniversary, was contacted by Biden, 80, to arrange a meeting with other senators. Along with McCarthy, Biden also emailed Senate Minority Leader Mitch McConnell (R-Ky.), House Minority Leader Hakeem Jeffries (D-NY), and Senate Majority Leader Chuck Schumer (D-NY). According to CNN, Biden informed them he wanted to talk about enacting a clear debt limit bill.
The projection is based on data that is presently available, according to the US Treasury Secretary, who also noted that the actual date that Treasury exhausts extraordinary measures may be several weeks later than these predictions due to the inherent variability of government income and outlays.
The precise day when the Treasury will be unable to pay the government's obligations is unknown, according to Yellen. “As more evidence becomes available, I will keep Congress informed in the next weeks. The debt ceiling must be raised or suspended as soon as possible in order to provide the government longer-term assurance that it will be able to make its payments, according to the predictions now in place, she added.
Additionally, Treasury is stopping the issuance of State and Local Government Series (SLGS) Treasury securities, the author of the letter stated. Special-purpose Treasury securities, or SLGS, are distributed to states and municipalities to assist them in adhering to specific tax regulations.
“SLGS that the Treasury issues count against the debt ceiling. Treasury will take this measure to control the risks related to the debt ceiling, but it will come at a cost since it will take away a crucial tool from state and local governments for managing their budgets.
Yellen claimed that the US has learned from previous debt limit impasses that putting off suspending or raising the debt limit until the very last minute can seriously undermine consumer and business confidence, increase the cost of short-term borrowing for taxpayers, and harm the country's credit rating.

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