US Treasury warns of potential default on public debt by June 1st

In a letter addressed to Republican Speaker of the House of Representatives Kevin McCarthtythe Secretary of the Treasury estimated that the UNITED STATES « will no longer be able to meet all of the government’s obligations in early June, and potentially as early as June 1 “, and could find themselves in default on their public debt, the ceiling of which is currently set at 31,000 billion dollars.

Thus, if no agreement is reached between Democrats and Republicans, from June 1, in order to be able to continue to face these constrained expenses, the federal government will have to strongly limit others, which could in particular concern the benefits of health or retirement.

Joe Biden will receive Kevin McCarthy

In a statement, the Congressional Budget Office (CBO) confirmed Treasury’s estimates, saying that ” as the income reporting campaign has been weaker than initially anticipated, we now believe there is a significantly higher risk that the Treasury will no longer have the necessary funds by early June ».

Last Wednesday, the House of Representatives voted on a plan proposed by Kevin McCarthy providing for a $4.5 trillion cut in federal spending over the next ten years in exchange for a $1.5 trillion ceiling increase, or a review clause. on March 31, 2024, which the Senate, with a Democratic majority, should not vote for.

Joe Biden repeated several times that the raising of the ceiling must be carried out unconditionally. The American president will also receive Kevin McCarthy at the White House on May 9.