U.S. Debt Limit Short Time Left to Deadline – Bloomberg

Whether the federal government can avoid a catastrophic default could depend on just seven days in May. It highlights the great threat posed by partisan conflict.

U.S. Treasury Secretary Janet Yellen told lawmakers on Wednesday that the Treasury Department could run out of special fiscal measures to keep the federal debt below the ceiling as early as June 1. Between now and then, US President Biden and members of both houses of Congress will be in Washington at the same time for a week.

It is possible that Congress will cancel the Memorial Day adjournment and that Mr. Biden will not attend the G7 Hiroshima summit to be held this month. Even then, there is little time left. It is unlikely that the Republicans and Democrats will reach a deal before Day X, which Yellen has pointed out, and a short-term response is more likely.

House, Senate and White House Schedules Align On Just 7 Days in May

Days when House and Senate are in session and Biden is in town

Source: Bloomberg

However, it seems difficult to postpone the settlement of the issue until the second half of this year. This is because the Republicans and Democrats have not shown any signs of compromise. While the Democrats are calling for an unconditional increase in the debt ceiling, House Speaker McCarthy has announced that he will not agree to an unconditional increase out of consideration for the Republican hardliners who are calling for significant spending cuts. Financial market turmoil may be needed to force the deeply divided parties to come to an agreement.

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