US will run out of money by JUNE 1 if Congress doesn’t raise or suspend the debt limit:

The Treasury Department now believes the nation could default on its debts as early as one month from Monday, according to a new letter Sec. Janet Yellen wrote to Congress. 

‘In my January 13 letter, I noted that it was unlikely that cash and extraordinary measures would be exhausted before early June. After reviewing recent federal tax receipts, our best estimate is that we will be unable to satisfy all of the government’s obligations by early June, and potentially as early as June 1,’ Yellen wrote. 

Just after Yellen’s letter was made public it was revealed President Biden had called McCarthy’s team to set up a meeting on how to move forward with the nation’s $31.4 trillion borrowing limit, three months after their last meeting. 

Biden requested a meeting of the ‘big four’ congressional leaders – McCarthy, Democratic leader Hakeem Jeffries, Senate GOP Leader Mitch McConnell and Senate Majority Leader Chuck Schumer for May 9. It’s not clear if they will all attend. 

The pair have been at loggerheads over how to move forward. Republicans insist they will not allow the debt ceiling to be raised without spending cuts, and Democrats insist they will only agree to a clean increase. 

The new date is a shorter timeline than forecasters had predicted The Congressional Budget Office (CBO) issued its own assessment confirming the nation would run out of the funds to pay all of its bills in early June after previously stating the deadline would fall between July and September. 

‘The extent to which the Treasury will be able to fund the government’s ongoing operations using cash balances and remaining extraordinary measures will also remain uncertain throughout May, even if it turns out that the Treasury runs out of funds in early June,’  CBO director Phil Swagel wrote in a Monday statement.

Any agreement over how to move forward would have to first be worked out between the speaker and the president. The GOP-led House and Democrat-led Senate would have to get on board and pass it and send it to the president’s desk, all in as little as a month. 

After reviewing recent federal tax receipts, our best estimate is that we will be unable to satisfy all of the government’s obligations by early June, and potentially as early as June 1,’ Treasury Sec Janet Yellen wrote

Meanwhile, the House is in session just 12 days between now and June 1. 

‘Given the current projections, it is imperative that Congress act as soon as possible to increase or suspend the debt limit in a way that provides longer-term certainty that the government will continue to make its payments,’ Yellen said. She stressed the exact date the government will run out of money for its payments is imprecise because of the variability of federal tax receipts. 

Last week the House passed sprawling debt ceiling legislation that Senate Democrats have insisted is dead on arrival in their chamber. 

Republicans have said their plan would save $4.5 trillion in exchange for lifting the nation’s borrowing cap by $1.5 trillion. Now GOP leadership insists the ball is in Biden’s court to come to the negotiating table. 

Now some House Democrats have even said publicly it’s time for Biden to come to the negotiating table. 

But after the political wrangling it took for McCarthy to get his conference on board with a party-line bill, questions loom over how he would get his caucus on board with a less conservative bill.  

Asked how he would next get his caucus to agree to a debt ceiling bill that could actually pass the Democrat-led Senate last week, the speaker demurred.  

Speaker Kevin McCarthy and President Biden are still at an impasse over how to move forward on raising the nation’s $31.4 trillion borrowing limit, and have not met to discuss the matter in three months

‘Now as the president continues to not negotiate what what I know is I’m confident that one party has taken care of the debt ceiling. We have lifted the debt ceiling so nobody could worry about whether the debt ceiling is gonna get lifted,’ the speaker said. ‘We did. The Democrats have not. The President wants to make sure the debt ceiling is going to be lifted, sign this bill.’

‘Other bills that we passed you say you’re going to veto, at the end of the day, you probably end up signing this one as well,’ McCarthy said in words directed at Biden. 

Last week Biden said he would meet with McCarthy only if he wouldn’t use the debt limit as leverage. 

‘Happy to meet with McCarthy,’ Biden said. ‘But not on whether or not the debt limit gets extended. That’s not negotiable.’