On June 26, U.S. Treasury Secretary Ellen announced that if the U.S. federal government's borrowing limit, the "debt ceiling," is not raised by June 5, government funds will run out and the possibility of a default on U.S. Treasury debt will increase. The time limit had previously been set at June 1 at the earliest, but was revised based on the latest fiscal outlook.
According to Yellen, there will be more than $130 billion (about 18.2 trillion yen) in spending on June 1 and 2, including payments to veterans and Social Security recipients, and the remaining cash reserves are expected to be "extremely low. The funding is likely to come to a standstill after the 5th after Saturday and Sunday.
She made this clear in a letter sent to House Speaker McCarthy, an opposition Republican, and other top congressional leaders. Yellen continued to call for an early increase in the debt ceiling, saying, "I urge Congress to act as soon as possible to protect the full faith and credit of the United States.
On the first of this month, Yellen had warned that government funding could run out as early as June 1 if the debt ceiling is not raised. However, she also indicated that she would report back to Congress with a new outlook based on the latest information.
The White House and McCarthy are engaged in major negotiations over raising the debt ceiling. The White House and McCarthy are in the midst of final negotiations over raising the debt ceiling, and although there are a few days left before the deadline, it remains to be seen whether a default can be averted.