(CNN) The Treasury is steadily draining the money it has to pay the state’s bills Debt ceiling impasse.
According to federal data, the Treasury Department had $57.3 billion in cash as of Thursday. The amount bounces back as the agency picks up revenue and makes payments, but the balance is down from $238.5 billion at the start of the month, when coffers were relatively flush with tax collections in April.
since then The United States has hit its borrowing ceiling In January, the Treasury Department had to rely on cash and exceptional measures To pay the bills until Congress addresses the debt ceiling. The agency had about $92 billion remaining in extraordinary measures as of Wednesday, down from about $220 billion at the end of January.
Treasury Secretary Janet Yellen has repeatedly warned lawmakers that her ability to avoid default may be over. As soon as June 1st. A nation needs to borrow money to make its payments because its liabilities exceed its revenues.
It is not known when the nation will reach the so-called date X, when the United States will default for the first time in history. It depends greatly on how much tax revenue comes in over the next few days and weeks. If it is less than expected, as was the case for Tax season 2022 collections In the past month, Yellen may soon run off the runway to continue paying the bills in full and on time.
Ben Harris, who served as the Treasury’s assistant secretary for economic policy until earlier this year, said the secretary may not know when the nation will default a day or two earlier.
Take a situation where the balances dwindle to just a few billion dollars: If the Treasury is counting on receiving a certain amount of revenue on a given day to cover payments, but it comes in with several billion dollars, it could create a default.
“The Treasury Department has guidelines for a prudent amount of cash,” Harris said, noting that one-week expenditures are set at a minimum balance of $150 billion. “We are definitely below that level now.”
while softening Congressional Budget Office Many other forecasters relate the X date as likely to occur during the first two weeks of June, so the Treasury will likely have enough funds to carry it through the middle of the month.
If that’s the case, the government probably won’t default until later in the summer. The agency will get another infusion of money from its estimated second-quarter tax payments, which are due June 15, and from $145 billion in an “extraordinary measure” that becomes available at the end of that month.
Although Appointment X is likely just around the corner, the White House and Republican House negotiators Their conversations paused To resolve the debt ceiling impasse for a while on Friday. Negotiations resumed later in the evening on Capitol Hill.
If the nation defaults, it will unleash Global economic and financial turmoil. The full consequences are unknown because it has never happened before, but many Americans, businesses, state and local governments will likely face delays in receiving federal payments, including Social Security benefits, food stamps and paychecks for federal and military employees.
“Negotiators should strive for a solution in the coming days,” said Rachel Snyderman, senior associate director for economic policy at the Bipartisan Policy Center.
This story has been updated with additional developments.
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