“U.S. Debt Default Deadline Pushed to June 5th: Urgency Remains High”

27.05.2023

U.S. Treasury Secretary Jane Yellen warned that inaction on the debt ceiling would “do serious damage.” The previous estimate for a potential debt default was June 1, which she updated on Friday (May 15) to June 5.

(Deutsche Welle Chinese website) U.S. Treasury Secretary Janet Yellen on Friday (May 15) willnational debt defaultThe deadline was updated to June 5, later than previously estimated.

Yellen has previously stated,A default could happen as early as June 1.The extension buys more time for Democratic President Joe Biden and Republican House Speaker McCarthy to negotiate raising the $31.4 trillion debt ceiling set by the federal government and avoid a potentially catastrophic default.

‘Waiting until the last minute’ could cause serious damage

However, Yellen said the extension did not make the situation any less urgent.

“A last-minute decision to shut down or raise the debt ceiling could seriously damage business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact America’s credit rating,” she wrote to McCarthy. “If Congress fails to raise the debt ceiling, it will cause severe hardship for American families, damage our global leadership, and raise questions about our ability to defend our national security interests.”

Biden said late on Friday that a deal was “very close” to being finalized. “I hope we’ll know by tonight whether we can make a deal,” Biden told reporters at the White House.

McCarthy: Now is ‘crunch time’

McCarthy acknowledged on Friday that now is a “crunch time.” He and Biden have been holding talks on raising the debt ceiling, with Republicans looking to secure cuts to the president’s aggressive spending plans, especially those covered by his Lower Inflation Act.

“I think we made progress yesterday,” he said. “I’m looking forward to making progress again today. I hope we can get this resolved.”

Voting to raise the debt ceiling used to be an annual routine for Congress, but recently ithas become a political leverinvolved in negotiations on many issues.

(AFP, AP, Reuters)

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