Treasury Secretary Janet L. Yellen said agency officials have decided they cannot guarantee all federal payments can be made in time beyond June 1 without raising the debt limit or suspending it. In a new letter to lawmakers on Monday, Yellen wrote that at this point the Treasury’s view is that a breach of the debt limit is “likely” in early June, possibly in June 1st.
“I think we’re going to get a deal tonight, we’re going to get a deal tomorrow, but you’ve got to do something this week to pass it and move it to the Senate,” McCarthy said. “So we’re moving until April, even before he said it was June 1 – we thought it was July. We don’t want to be at this last minute. I think that’s a terrible way to go. “
The two parties are at odds over how much discretionary spending is appropriate in the coming fiscal year. Democrats want to increase the general pot, including defense and nondefense accounts; Republicans want to reduce it, while increasing defense, veterans and border security funds, which would cut other domestic and foreign aid programs even deeper.
House Republicans passed a bill in April that would cap total fiscal 2024 spending at levels appropriated two years ago, and then set caps for the next nine years allowing 1 percent annual growth. Democrats have pushed for, at the very least, something close to a freeze at fiscal 2023 levels, and caps that would last no more than two years. Republicans are pushing for something between two and 10-year caps.
“You’re out for 10 days, so the president has to be serious,” McCarthy said. “We need to spend less next year than we spent this year.” He said defense cuts were “off the table” because of threats posed by China and the need to continue arming Ukraine and replace depleted US arms stocks.