U.S. debt ceiling deadline extended to June 5, Yellen says

WASHINGTON Treasury Secretary Janet Yellen said Friday the projected debt ceiling deadline is extended to June 5, four days later than previously estimated.

Yet, Yellen renewed her warning in a letter to Congress that inaction on raising the borrowing limit would “cause severe hardship.”

Yellen’s latest letter to legislators on the “X-date” came as Congress broke for the long Memorial Day weekend. She said that the Treasury Department had deployed an extraordinary measure not used since 2015 to get the U.S. financial position to this point.

The X-date arrives when the government no longer has enough of a financial cushion to pay all its bills, having exhausted the measures it’s been using since January to stretch existing funds.

Earlier Friday, Republican House Speaker Kevin McCarthy said his debt negotiators and the White

House had hit “crunch” time, straining to wrap up an agreement with President Joe Biden to curb federal spending and lift the nation’s borrowing limit ahead of the fast-coming deadline.

They had hoped to end weeks of frustrating talks and strike a deal by this weekend.

The Treasury Department now says the government could start running out of money as soon as a week from Monday, sending the U.S. into a potentially catastrophic

Lawmakers are expected to claw back $30 billion in unspent COVID-19 funds, as the pandemic emergency has officially been lifted.

default with economic spillover around the world.

A person familiar with the talks said the two sides were “dug in” on whether or not to agree to Republican demands to impose stiffer work requirements on people who receive government food stamps, cash assistance and health care aid.

They are all but certain to claw back some $30 billion (U.S.) in unspent COVID-19 funds now that the pandemic emergency has officially been lifted.