(NewsNation) — In a letter to House Speaker Kevin McCarthy, Treasury Secretary Janet Yellen pushed back her predicted deadline for reaching the debt ceiling from June 1 to June 5.
Before this, she had said the United States would run out of cash by June 1.
Yellen’s letter comes as Congress breaks for a long Memorial Day weekend and tensions build over whether a deal between the White House and Republicans in Congress will be struck in time.
“Since January, I have highlighted to you the risk that Treasury would be unable to satisfy all of our obligations by early June if Congress did not raise or suspend the debt limit before that time. In my letters, I also noted that I would continue to update Congress as more information became available,” Yellen wrote. “Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5.”
Not raising the debt ceiling could lead to a potentially catastrophic default. A default would potentially devastate the U.S. and global economies depending on the duration of the political standoff.
On Friday, President Joe Biden said, “Things looking good. Very optimistic. … Negotiations going on. Will know by tonight whether we’ll be able to have a deal.”
However, also on Friday, White House spokesperson Andrew Bates pushed back on GOP efforts to add new work requirements to social safety net programs as part of the debt deal.
“House Republicans are threatening to trigger an unprecedented recession and cost the American people over 8 million jobs unless they can take food out of the mouths of hungry Americans,” the statement said. “This would be done through new, additional work requirements designed to tie the most vulnerable up in bureaucratic paperwork, which have shown no benefit for bringing more people into the workforce.”
Work requirements have been a major sticking point in the ongoing debt negotiations.
“President Biden and House Democrats are standing against this cruel and senseless tradeoff,” the statement added, saying, “A number of Republican House members have also spoken out against these ineffective requirements.”
NewsNation political editor Chris Stirewalt said Yellen’s extension gives Democrats a chance to try to get a longer-term deal.
“The issue here is how long,” Stirewalt said. “Republicans don’t want to give Joe Biden the gift of having a spending package and a debt package that goes through the next presidential election. Democrats would like to get through 2024 so that the man in charge doesn’t have to go through this while he’s facing voters.”
This story is developing. Refresh for updates.
The Associated Press contributed to this report.