In a letter to US congressional leaders on May 26, Treasury Secretary Janet Yellen said lawmakers now have until June 5 to raise the US debt ceiling to avoid a catastrophic default.
Ms. Yellen's statement made the atmosphere in the US debt ceiling negotiation room seem more "breathable".
Ms. Yellen has previously warned that the US could default on its debt as soon as June 1. In fact, the date when the US government defaults could change because the nature of federal cash flow is unpredictable.
For this reason, Ms. Yellen's estimate has drawn criticism from Republicans, who argue that the June 1 deadline is nothing more than a political ploy to pressure Republicans in the negotiations.
“That’s the answer to what House Republicans have been asking about X-day. Now we know, and that puts more pressure on us,” said House Financial Services Committee Chairman Patrick McHenry, one of the Republican negotiators.
On the evening of May 26, President Biden expressed hope that a deal could be reached soon. “Things are looking good. I’m very optimistic,” Mr. Biden said as he left the White House.
“The debt ceiling talks are going well. I hope we’ll have some clear evidence tonight (May 26, US time) before the clock strikes 12,” US President Joe Biden said optimistically. Photo: San Diego Union Tribune
Mr. McHenry said he agreed with the President's comments, while emphasizing that the negotiations were not over.
“We are in the midst of trying to meet the June 5 deadline, and we are having to work out some really difficult terms in these final hours,” McHenry added.
Any deal would have to win approval in the Republican-controlled House and Democratic-led Senate before President Biden could sign it into law, a process that could take more than a week.
Although negotiators have been working day and night, no deal has been announced yet.
But a tentative deal has been reached that would raise the debt ceiling for two years while imposing strict limits on discretionary spending not related to the military or veterans during the same period, according to a US official. In addition, defense spending would be allowed to increase by 3% next year, according to Mr. Biden’s budget request.
Lael Brainard, director of the White House National Economic Council, urged negotiators to redouble their efforts to reach a final deal.
“Negotiators have made significant progress toward a bipartisan budget deal in recent days. Treasury Secretary Yellen’s letter underscores the urgent need for Congress to act quickly to prevent a default,” Brainard said .
Nguyen Tuyet (According to Politico, Reuters, NY Times, Bloomberg)
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