The Treasury is burning money amid bumpy debt ceiling talks

(CNN) The Treasury is steadily sucking up the money it has to pay the bills of the state’s impasse debt ceiling.

The Treasury Department had $57.3 billion in cash on Thursday, according to federal records. The amount bounces back as the agency collects revenue and makes payments, but the balance is lower than the $238.5 billion at the start of the month when the Treasury was relatively flat with tax collections in April.

Since then The United States has reached its borrowing ceiling In January, the Treasury Department had to count on cash and exceptional measures To pay the bills until Congress tackles the debt ceiling. The agency had about $92 billion left in extraordinary measures on Wednesday, up from about $220 billion at the end of January.

Treasury Secretary Janet Yellen has repeatedly warned lawmakers that her ability to avoid defaults may be over. Soon June 1. A country has to borrow money to make its payments because its liabilities are greater than 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 a lot on how much tax revenue comes in in the coming days and weeks. If it is less than expected, as was the case for Tax Season 2022 collections Last month, Yellen may soon run off the track to continue paying bills in full and on time.

Ben Harris, who was 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 early.

Take a situation where balances dwindle to just a few billion dollars: If the Treasury is counting on a certain amount of revenue on a given day to cover payments, but it comes in several billion dollars, it could trigger a default.

“The Treasury has cautious guidelines for cash withdrawals,” Harris said, noting that spending for a week is set at a minimum balance of $150 billion. “We are definitely below that level now.”

During the softening of the Congressional Budget Office Many other forecasters say the X date will likely occur in the first two weeks of June, so the Treasury will likely have enough money 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 cash infusion of estimated second-quarter tax payments, due June 15, and $145 billion in an “extraordinary measure” that will become available at the end of that month.

Hold conversations

Though Appointment X is likely just around the corner, White House and Republican House negotiators have stalled their talks on Friday to briefly resolve the debt ceiling impasse. Negotiations resumed on Capitol Hill later that evening.

If the nation defaults, it will unleash global economic and financial turmoil. The full ramifications are unknown because it has never happened before, but many Americans, businesses, state and local governments will likely experience delays in receiving federal payments, including Social Security benefits, food stamps and paychecks for federal and military employees.

“Negotiators should work toward a resolution 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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