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US could run out of money to pay its bills 'in less than a month'

NewsUS could run out of money to pay its bills 'in less than a month'

The United States could run out of money to pay its bills in less than a month unless Congress raises or suspends the debt limit, Treasury Secretary Janet Yellen has warned.

She said on Monday (May 1) that President Biden and lawmakers need to reach a swift agreement to avoid defaulting on the nation’s debt.

Reports say that Ms Yellen’s warning reduces the projected amount of time lawmakers have to reach a deal before the government runs out of money to pay all of its bills on time.

Negotiations between the House, Senate and the President over government spending has seen a stand-off between the President and the House Republicans.

It is claimed that the Republicans have refused to raise the limit without deep spending cuts attached.

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The President on Monday called the top four leaders in Congress to ask for a meeting on May 9 to discuss the issues.

He is said to have reached out to Speaker Kevin McCarthy and Representative Hakeem Jeffries of New York, the minority leader, along with Senator Chuck Schumer of New York, the majority leader, and Senator Mitch McConnell of Kentucky, the minority leader.

The New York Times reports economists warning that failure to raise the debt limit could impact on financial markets and the global economy.

It says that in addition to paying Social Security benefits and salaries for the military and government workers, the country must also make interest and other payments to bondholders.

The Treasury Department had previously estimated that it could run out of money in early June but has now set that date as June 1.

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