The US will pay its June 2-13 bills if Congress doesn’t raise or suspend the country’s debt ceiling, according to an analysis released Tuesday by the influential bipartisan policy center. face a “high risk” of cash shortages. A think tank that closely tracks federal spending.
The analysis highlights the growing likelihood that the US will default on its debt as soon as next week. This comes amid negotiations between the White House and Congressional Republicans to reach an agreement that would also remove the $31.4 trillion borrowing cap.
“At the beginning of June, the Treasury will be skating on very thin ice, and it will only get thinner with each passing day,” said Shai Aqabath, director of economic policy at the center. rice field. “Of course, the problem with skating on thin ice is that sometimes you fail.”
The center said that after Memorial Day, the Treasury Department will operate with “dangerously low” cash on hand, and risks will rise each day in June. This department has used an accounting operation known as Temporary measure Because the US technically delays defaults The debt ceiling was reached in JanuaryHowever, they are expected to run out quickly.
The center said the relief could be granted if the federal government collects enough revenue by the June 15 quarterly tax deadline. In that case, the default, the so-called X date, may be pushed back to July.
But Treasury Secretary Janet L. Yellen said this week that she doesn’t think the federal government will have enough cash by mid-June.
In a letter to Congress on MondayYellen reiterated her prediction that X-Date could arrive as early as June 1. Her warning did not include warnings included in previous updates that suggested the government’s cash reserves could continue for several more weeks. . Instead, she emphasized the urgency of the situation.
“The failure of Congress to raise the debt ceiling would cause serious hardship for American families, undermine America’s position as global leader, and call into question our ability to defend our national security interests,” Yellen said. Let’s go,” he said.
As the X-Date approaches, the Treasury Department continues to check with federal agencies on the timing of upcoming spending. The Treasury Department recently sent a memo to government agencies asking if scheduled payments could be delayed. The Washington Post previously reported on the memo.
The exchanges are similar to those communicated by the Treasury during the dispute over the 2021 debt ceiling and are part of the Treasury’s cash management method.
Treasury spokeswoman Lily Adams said it was “important for the Treasury to have up-to-date information on the size and timing of agency payments in order to make accurate projections about the debt ceiling.” . “As with previous debt relief episodes, the Treasury Department intends to continue regular communication with all aspects of the federal government regarding planned spending.”
