"Based on the latest data available to us, we estimate that in the absence of an agreement, the Treasury will no longer be able to meet the needs of the federal government starting June 5th." This is what US Treasury Secretary Janet Yellen wrote in a new letter to Congress in which she warned that the government could default on June 5 without raising the country's debt ceiling of $31.4 trillion. .
Initially this "red line" was set for June 1st. But negotiations are underway with the Republican majority in Congress to avert a default.
Yellen recalled in the letter addressed to the Republican Speaker of the House of Representatives, Kevin McCarthy, that payments of 130 billion dollars will be sent to veterans and people enrolled in the Social Security and Medicare programs in the first two days of June. A measure, she warned the former Federal Reserve governor, that she will leave the Treasury in an "extremely precarious" position regarding the availability of resources. Yellen thus invited all interested parties to negotiate "in good faith" to obtain a compromise agreement as soon as possible which would allow for the avoidance of default.