Yellen Sets June 5 Deadline to Avoid Debt Default as Negotiations Continue

Treasury Secretary Janet Yellen revised previously estimated dates for when the United States would default on its debts, setting a hard deadline of June 5 for the White House and Congress to reach a deal to raise or suspend the debt ceiling to avoid a default.

Details: In a letter sent to congressional leaders, Yellen stated, “Based on the most recent available data, we now estimate 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.” Yellen added that in the first two days of June, $130 billion in payments, including payments to “veterans and Social Security and Medicare recipients,” will leave the Treasury with an “extremely low level of resources.” With an expected payment amount totaling $92 billion due in the week of June 5, Yellen warned the Treasury’s resources would be “inadequate to satisfy all of these obligations.” Yellen again warned of the “severe hardship” on American families and the nation's global standing should the payments be missed, urging congressional leaders to act to “protect the full faith and credit of the United States.”

How The Media Covered It: Fox Business reported that negotiations between the White House and House Republicans “were still far apart,” despite Axios and The Hill citing Republican leaders expressing “progress” in talks. The Hill reported on the debt ceiling standoff’s impact on financial markets and noted that Yellen’s letter “notably came after stocks closed on the up Friday.”