Key takeaways:
- Treasury Secretary Janet Yellen sent a letter to congressional leaders warning that the U.S. government will run out of money to pay its bills if Congress does not raise or suspend the debt limit by June 5.
- Debt limit negotiators appear to be closing in on a deal, however it remains to be seen whether Congress will be able to reach a deal before the X-date.
- If Congress fails to raise or suspend the debt limit by June 5, the government will be unable to pay its bills and will be forced to default on its debt.
Treasury Secretary Janet Yellen sent a letter to House Speaker Kevin McCarthy (R-CA) and other congressional leaders on Friday, warning that the U.S. government will run out of money to pay its bills if Congress does not raise or suspend the debt limit by June 5.
The letter, which was two pages long, warned that the government will not be able to pay its bills if the debt limit is not raised or suspended by June 5. This date is known as the “X-date.” Yellen’s letter is the latest update on the X-date, which had previously been estimated to be sometime in August.
Yellen’s letter comes as debt limit negotiators appear to be closing in on a deal. The debt limit is a legal cap on how much money the government can borrow to pay its bills. If the debt limit is not raised or suspended, the government will not be able to pay its bills and will be forced to default on its debt.
The debt limit has been a source of tension between Democrats and Republicans in Congress for years. Democrats have argued for raising the debt limit to allow the government to pay its bills, while Republicans have argued for spending cuts as a condition for raising the debt limit.
It remains to be seen whether Congress will be able to reach a deal before the X-date. If Congress fails to raise or suspend the debt limit by June 5, the government will be unable to pay its bills and will be forced to default on its debt.
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