Breaking news: The U.S. government will run out of money to meet all its payment obligations on June 5 if Congress does not raise the debt ceiling, according to a letter Treasury Secretary Janet L. Yellen sent to lawmakers on Friday.
The new projections provide a timeline for lawmakers on Capitol Hill as they try to strike a deal to raise the nation’s borrowing limit and fund the federal government. Yellen had previously told Congress that the U.S. could run out of funds in early June but “as soon as” June 1. Treasury’s new estimate provides more specificity on when the government will exhaust its funds.
Uncertainty over the debt ceiling has reached a level not seen in years after a narrow House Republican majority conditioned a debt increase on spending cuts. Rep. Andy Harris , another House conservative, added of the longer debt ceiling increase: “You’ve got to add things into it, not compromise things away.” Rep. Chip Roy , a key conservative leader, downplayed the idea that the deal would lead to McCarthy losing his speakership, but added of the deal: “I think it’s an exit ramp about five exits too early.”
Exactly when the government will run out of money isn’t certain. Two prominent credit rating agencies warned that they could downgrade the U.S. government’s coveted AAA debt rating in the event of a default.
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