A public service announcement. The end of the world has been postponed by at least four days. Janet Yellen had repeatedly assured us that the nation would run out of money to cover its debts by June 1st. But with a deal in the works, seemingly drawing closer by the day, she’s now saying we should still have some change left in the national piggy bank until June 5. At the same time, this all may turn out to be much ado about nothing. ABC News is reporting that both the White House and the Speaker’s office are increasingly “optimistic” that they are close to a deal that will make it through both chambers and to the President’s desk. The emphasis remains on the word “may,” however, because there are still a few potential flies in the ointment.
Treasury Secretary Janet Yellen on Friday issued a new letter to Congress estimating that the government won’t be at risk of running out of money to pay all its bills until June 5 — slightly later than the agency’s previous estimate of as soon as June 1.
“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,” Yellen wrote.
Republicans questioned Yellen’s methodology, with some accusing her of “manipulation tactics.”
Some members of the House GOP are understandably skeptical of Yellen’s pronouncements. She’s not revealing any of the magical bookkeeping taking place in the background in what should be a transparent process.
Will the media join our efforts to demand Janet Yellen show her work? I have been asking for three months.https://t.co/vFaNf58HRE
— Congressman Bob Good (@RepBobGood) May 26, 2023
Joe Biden is pretty much out of the loop at this point. He once again headed off to vacation at Camp David while others attempt to avoid a veritable shutdown if the debt ceiling can’t be raised. But he described himself as “hopeful” that we would have a deal in the coming days. Congressman Patrick McHenry, one of the GOP negotiators, offered a similarly optimistic view before meeting with Kevin McCarthy to try to hammer out the final details.
That doesn’t mean we’re in for smooth sailing, however. McCarthy has already promised to maintain his new policy of giving lawmakers at least three days to review the final package before calling a vote. And since nobody has seen the fine print of a proposed deal, it may not succeed. Democrats still don’t want to give any ground on spending, so the House GOP will have to remain unified. But some of the conservatives in the Freedom Caucus are already threatening to revolt.
They want McCarthy to push for border security provisions as part of the deal, as well as cuts to the IRS. Biden and the Senate Democrats remain firmly opposed to those provisions, so they may not make it into this agreement. But without a unified House GOP caucus, the whole thing could still fall apart.
This puts the Republicans in a tricky position. If Biden had stuck with his “my way or the highway” approach and we ran out of money, the blame would lie with the White House. (Even though the media would do its level best to blame the GOP anyway.) But if a deal was on the table that Biden was willing to sign and the Freedom Caucus walked away, there will be a plausible case for shifting the blame back to the Republicans.
There is still another option available if Congress can muster the collective IQ to seize it. Assuming there is still no finished deal that could pass, they could come back on Tuesday and pass a bare-bones, two-month budget to briefly raise the debt limit and keep the lights on while the rest of the deal is worked out. Will they have the common sense to do that much? I wouldn’t bet the ranch on it.
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