(CNN) Treasury Secretary Janet Yellen has strengthened her warning to Congress that there is little time left to speak debt ceiling before the nation defaults on its obligations.
It is “very likely” that the agency will not be able to pay all of its bills in full and on time once June 1she wrote in Yellen e-mail House Speaker Kevin McCarthy on Monday.
“With one more week of information now available, I am writing to indicate that we estimate that it is very likely that the Treasury Department will no longer be able to meet all of the Government’s obligations if Congress does not take action to raise or suspend the debt limit by early June, and possibly the first of June. June “.
Yellen’s latest letter to Congress comes as White House and House GOP negotiators continue to try to reach an agreement before the so-called Date X, when the nation defaults.
McCarthy, who is scheduled to meet with President Joe Biden on Monday, said “Nothing agreed,” Although there are some good discussions. Among the sticking points is depth spending cuts.
The spokesman said the package should meet this week for the House of Representatives to pass it and pass it on to the Senate.
Yellen spent most of May explaining the seriousness of the potential default, which would be a first for the United States. She said he could unleash the global economic recession and financial turmoil, as well as harm to the millions of Americans who depend on it Federal government paymentsincluding Social Security recipients, federal workers, and Medicare providers.
Several other analyzes support Yellen’s prediction that the X date may arrive in early June, although they don’t necessarily think it is as early as June 1.
“Our projections show that the Treasury is able to reach June 14 before exhausting its funds, but there is no room for error and that date could change,” Nancy Vanden Houten, chief US economist at Oxford Economics, wrote in a report on Monday.
while, Goldman Sachs On Friday, the agency said the agency faced a “clear risk of losing payments” on June 8 or June 9.
Wells Fargo analysts said they are a little more optimistic than Yellen that the Treasury could make it to June 15. The minister said the odds are “extremely low”.
However, they added that their confidence was shaken by previous forecast errors that underestimated the need for financing and the size of the budget deficit. They noted that even in the best-case scenario, the Treasury Department will not have much money on hand in the first half of next month.
“In other words, the fifty-year-old’s chance of default in early June absent a debt ceiling increase remains deeply troubling and highlights the clear risk of hitting deadline X in early June,” they wrote in a note.
If the Treasury can keep paying the bills until the middle of next month, the government probably won’t default until later in the summer. The agency will get another infusion of money from its estimated second-quarter tax payments, due June 15, and from $145 billion in a given time period. “extraordinary measure” which will become available at the end of that month.
The treasury has $60.7 billion in Cash in the box As of Friday, according to federal data. The amount bounces back as the agency picks up revenue and makes payments, but the balance is down from $238.5 billion at the start of the month, when coffers were relatively flush with tax collections in April.
Since the US hit its borrowing cap in January, the Treasury Department has had to rely on liquidity and extraordinary measures to pay the bills until Congress addresses the debt ceiling. The agency had about $92 billion remaining in extraordinary measures as of Wednesday, down from about $220 billion at the end of January.
This title and story have been updated with additional information.
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