Biden Govt Denies Plans Of Stalling Payments To Delay X-Date – Crypto News – Crypto News
Connect with us
debt default debt default

Business

Biden Govt Denies Plans Of Stalling Payments To Delay X-Date – Crypto News

Published

2 years ago

on

As the United States edges closer to a potential default on its debt, the Treasury Department had reportedly been inquiring government agencies about the possibility of delaying upcoming payments in order to avoid a catastrophic default. However, those rumors of a contingency plan were dismissed by the Biden administration on Thursday.

US Denies Contingency Plan

According to a report by WSJ, Treasury officials had quietly been preparing for the possibility of delaying certain payments after June 1. With the deadline fast approaching and Congress yet to raise the debt limit, the Treasury was seeking flexibility by considering payment delays until it had Sufficient funds to cover the full day’s bills. While discussions surrounding this plan had taken place across the government, no instructions were given to agencies to alter their payment procedures.

Read More: McCarthy Stays Optimistic, Claims “We Could Get Debt Ceiling Deal Any Time”

Earlier reports had revealed that the Treasury reached out to counterparts in federal agencies to explore the option of delaying payments due before early June. By postponing payments until June 15, the expected influx of quarterly tax payments could potentially provide additional funding, thereby extending the default deadline into July. This strategy would have offered temporary relief and allowed for further accounting measures to prevent an immediate default.

Mounting Debt Ceiling Pressure

Federal officials are bracing for the possibility that Congress will fail to raise the borrowing cap of approximately $31.4 trillion in time. Treasury Secretary Janet Yellen has consistently emphasized the need for prompt action from Congress to avert financial calamity. In a letter addressed to lawmakers on Monday, Yellen warning that the US could face an inability to meet all its financial obligations as early as June 1 if decisive measures were not taken.

In conjunction with the contingency planning, Treasury officials have been collaborating with agencies to assess their payment requirements. David Lebryk, Treasury’s fiscal assistant secretary, issued a memo earlier this month requesting agencies to notify the Treasury of any large impending payments, which could magnify the agency’s coffers ahead of the due date.

Economists and market experts have repeatedly cautioned that failure to reach a deal by June 1 could have severe consequences, potentially leading to a market crash and a burgeoning recession. Furthermore, extending the deadline itself could introduce volatility in both the US stock market and the crypto marketas investors grapple with uncertainty stemming from the potential default scenario.

As the clock ticks, the financial stability of the United States hangs in the balance and therefore demands swift resolution from the ongoing debt ceiling talks between the Biden administration and the Republicans.

Also Read: Binance Launches NFT Lending Feature To Rival Blur’s Blend Protocol

CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending