Yellen pushes back on predictions of possible US default date

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen on Friday extended the deadline for raising the federal debt ceiling, saying the government would default if Congress did not raise the country’s debt ceiling to $31.4 trillion by June 5.

Yellen previously said a default could occur as early as June 1.

The extension gives White House and Congressional negotiators more time to hammer out a deal to raise the nation’s statutory borrowing capacity ceiling.

In a letter to Congress, Yellen said his department will make more than $130 billion in scheduled payments in the first two days of June, including to veterans and Social Security and Medicare recipients. .

“During the week of June 5, the Treasury is expected to make about $92 billion in payments and transfers,” including a quarterly adjustment of about $36 billion to the Social Security and EI Trust Funds. health insurance, wrote Yellen.

“Therefore, our projected resources would be insufficient to meet all of these obligations,” she said.

Yellen also said the department used an extraordinary cash management measure on Thursday, swapping about $2 billion in Treasury securities between the Civil Service Retirement and Disability Fund and the Federal Corporate Bank to avoid the potential default date. The measure was last used in 2015, she said.

(Reporting by Rami Ayyub; Editing by Ismail Shakil and Tim Ahmann)

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