Debt limit: the new deadline is June 5

The deadline for Congress “to suspend or increase the debt limit” has been extended from June 1 to June 5, the treasury secretary Janet L. Yellen let lawmakers know in a new letter to House speaker Kevin McCarty on May 26.

Ms. Yellen’s update came as White and House Republicans are close to reach an agreement on the matter, but given that the Memorial Day holiday caused a week-end vacancy in Congress the negotiations will not resume before Tuesday May 30.

Both president Joe Biden and Speaker Kevin McCarthy said Friday that they were optimistic about an agreement before the deadline though many points of contention remained to be solved.

In her last later, Janet Yellen wrote that “the most recent data” revealed that “Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5.”

“We have learned from the previous debt limit impasses,” the letter said, “that waiting the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.”

Lawmakers’ have insisted on “spending reduction” while the government has strived to preventing “large cut.” However, many other elements necessary to the deal are missing.  

The Associated Press reported early Friday that House Republicans want more rigor for the government to grant food stamps, cash assistance and health care aid. They consent on the other hand that the spending on the military and veterans’ programs would continue to grow, wrote the New York Times.

The United States debt ceiling is now 31 trillion dollars.

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