Treasury Secretary Janet Yellen on Monday warned that the United States may run out of measures to pay its debt obligations by June 1st, earlier than the government and Wall Street had been expecting. In a letter to House Speaker Kevin McCarthy (R-California), Yellen said new data on April tax receipts forced the department to move up its estimate of when the Treasury Department “will be unable to continue to satisfy all of the government’s obligations” to potentially as early as June 1st, if Congress doesn’t raise or suspend the debt limit before then. This date is earlier than most Wall Street economists were expecting. Goldman Sachs’ latest estimate this week put the deadline at some point in late July, though the bank’s economists acknowledged that weaker-than-expected tax receipts could advance that timeline. On Monday, President Joe Biden called the “big four” congressional leaders, Senate Majority Leader Chuck Schumer (D-New York), Senate Minority Leader Mitch McConnell (R-Kentucky), McCarthy and House Democratic Leader Hakeem Jeffries (D-New York), to invite them to a May 9th meeting at the White House to discuss the debt limit. In response to Yellen’s letter, McCarthy pushed blame for the stalemate in negotiations on President Biden, saying the president “has refused to do his job.” The timeline is further compressed by the fact that the House of Representatives is set to be in session for only 12 days while the Senate is in session for only 15 days in May. Both chambers are only scheduled to be in for eight days at the same time during the month. Yellen’s letter comes less than week after a Republican bill to raise the debt limit and slash government funding passed the House, but only after McCarthy made eleventh hour changes in order to win over GOP holdouts.
The Congressional Budget Office also revised its estimate for the so-called x-date on Monday.
While the House remains in recess until next week, the Senate convened at 10:00 A.M. and is expected to consider the nomination of Michael Farbiarz, to be US District Judge for the District of New Jersey as well as the nomination of Robert Kirsch, to be US District Judge for the District of New Jersey. The Senate will also take up a Motion to invoke cloture on the nomination of Orelia Eleta Merchant, to be US District Judge for the Eastern District of New York.
