(USNewsMag.com) – As the June 1 deadline for raising the debt ceiling looms, the Treasury Department is reaching out to federal agencies asking to make payments “at a later date” in a move by Treasury Secretary Janet Yellen and the Biden administration to buy time to pay the country’s debts.
An internal memo sent by Treasury’s Fiscal Assistant Secretary David Lebryk the week of May 15, requested departments reconcile reported amounts with actual payment activity. The Treasury Department requested being notified two days in advance for deposits and disbursements from $50 million to $500 million and five days in advance for anything over $500 million, according to the report on the memo.
Treasury officials have asked which payments that are due before June could be flexible and moved.
On May 22, another letter from Yellen was sent to House Speaker and California Rep. Kevin McCarthy stating the June 1 deadline for default is still a real possibility if the debt ceiling is not raised. In February, the $31.4 trillion debt limit was reached, and extraordinary measures have been put in place since then to avoid default, according to Yellen.
On May 22, President Joe Biden met with McCarthy to discuss raising the debt ceiling, though an agreement was not reached. Both said the discussion was productive. The move by the Treasury Department is an effort to give the administration and the Republicans more time to negotiate.
Republicans are seeking to cut spending while raising the debt ceiling. The House passed its bill, the Limit, Save, Grow Act, on April 26, which raises the debt ceiling by $1.5 trillion by the end of March 2024, whichever comes first. Democrats and Biden continue to say they will not negotiate and want to simply raise the debt ceiling with no cuts to spending.
The U.S. has never defaulted and if an agreement isn’t reached this would be the first time the country is unable to pay its bills.
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