US Treasury Department delays default warning to June 5

Yellen's announcement gives Democratic President Joe Biden and Republican House Speaker Kevin McCarthy more time to reach an agreement to raise the U.S. government's borrowing limit. The Treasury Department had previously said a deal needed to be reached as soon as June 1.

US Treasury Secretary Janet Yellen. Photo: Reuters

Patrick McHenry, one of the Republican negotiators, said they could meet the June 5 deadline. “We’re not done yet, but we’re in a window where we can do this and we have to come to some really tough terms,” he told reporters.

Meanwhile, President Biden told reporters that he thought negotiators were very close to a deal. "Things are looking good. I'm very optimistic," he said.

Negotiators appear to be close to a deal to lift the two-year cap and reach an agreement to limit spending on many US government programs next year, but remain at odds over some issues related to poverty and health care benefits.

The two-year extension means Congress would not need to address the cap again until after the 2024 presidential election. The deal under consideration would increase funding for the military and veterans care while essentially keeping non-defense spending at current levels, according to one official.

The deal could also scale back funding for the Internal Revenue Service, which received an additional $80 billion last year, in part to boost enforcement and bring in more tax revenue. Republicans have sought to roll back that funding.

If the US Congress fails to raise the self-imposed debt ceiling by June 5, it could trigger a default that would rock financial markets and push the US into a deep recession.

Several credit rating agencies said they had put the United States on review for a possible downgrade, which would push up borrowing costs and erode the country's position as the backbone of the global financial system.

Hoang Anh (according to Reuters)

Source: https://www.congluan.vn/bo-tai-chinh-my-lui-canh-bao-vo-no-den-ngay-5-thang-6-post249309.html