U.S. Treasury Asks Government Agencies to Defer Payments Amid Debt Ceiling Stalemate

The U.S. Treasury Department is asking government departments whether they can defer payments that are due soon, even as negotiations on the U.S. debt ceiling have stalled. According to sources,To postpone the so-called “X Day” when cash reserves are depleted, U.S. Treasury Department officials have asked other federal agencies for flexibility in payments due by early June.
(Recap:U.S. Debt Default Bomb Disposal” Biden McCarthy 5/22 to restart cap negotiations）
(background supplement:6/1 U.S. debt default day: a great opportunity for Bitcoin?）

beautifulAfter China hit the US$31.4 trillion debt ceiling in January this year, the US Treasury Department was forced to use special measures to prevent debt default. However, U.S. Treasury Secretary Yellen recently warned that the ability of the U.S. Treasury Department to use special accounting methods to maintain the debt ceiling may be exhausted as soon as early June.

On the issue of raising the U.S. debt ceiling, U.S. President Joe Biden (Joe Biden) and Republican House Speaker Kevin McCarthy (Kevin McCarthy) restarted negotiations on the 22nd. No agreement can be reached and there is a stalemate.

Further reading:U.S. treasury cash bottoms out in 7 days” Biden and McCarthy’s debt negotiations “Joe can’t agree”, Bitcoin is holding on to 27,000 mg

Treasury asks government agencies if they can defer payments

While U.S. debt ceiling talks linger, Washington Post cites sourcesreportthe U.S. Treasury Department is asking whether the country’s government agencies can defer payments that are due soon.

According to sources,To postpone the so-called “X Day” when cash reserves are depleted, U.S. Treasury Department officials have asked other federal agencies for flexibility in payments due by early June.

The U.S. Treasury Department said on Tuesday it was asking other federal agencies for more clarity and improved communication on projected receipts and payments in the coming days in order to more accurately predict when the government will have cash in the absence of an increase in the federal debt limit shortage.

A Treasury Department spokesman said the department is not asking federal agencies to defer payments at this time, but is asking for increased communication about future payments. He explained:

To make accurate forecasts around the debt ceiling, the Treasury must have up-to-date information on the amount and timing of agency payments. As it has previously done with the debt ceiling, the Treasury Department will continue to communicate regularly with all levels of the federal government about its planned spending.

The real X date may be 6/8

U.S. Treasury Secretary Yellen also sent a letter to Congress for the third time on Monday, saying that June 1 will be the “deadline” for the U.S. to raise the debt ceiling. Still, some Wall Street forecasters say the real X Day — the day the government ends up missing payments — could be June 8 or 9.

Marc Goldwein, senior policy director at the Committee on a Federal Budget (CRFB), said:

They can go even further if they get to June 15th, when a huge amount of quarterly tax dollars will hit the coffers and government officials are looking for ways to hoard cash to buy a few more days.

As for what happens if it is really violated? According to a study by the White House Council of Economic Advisers, if the United States falls into a debt default, it may cause an economic recession as severe as the Great Depression, causing 8 million Americans to lose their jobs and the stock market to plummet by about 45%.

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