Debt ceiling deadline is extended to June 5, later than previously estimated, Yellen says

They had hoped to end weeks of frustrating talks and strike a deal by this weekend. Treasury now says the government could start running out of money as soon as a week from Monday, sending the U.S. into a potentially catastrophic default withAnxious retirees and social service groups were among those making default contingency plans as lawmakers left town for the long holiday weekend.

“We know it’s a crunch,” McCarthy said as he arrived at the emptied out Capitol, acknowledging more progress needed to be made. A person familiar with the talks said the two sides were “dug in” on whether or not to agree to Republican demands to impose stifferHouse Democrats have called such requirements for health care and food aid a nonstarter.House Republicans have pushed the issue to the brink, displaying risky political bravado in leaving town for the Memorial Day holiday.

Weeks of negotiations between Republicans and the White House have failed to produce a deal — in part because the Biden administration resisted negotiating with McCarthy over the debt limit, arguing that the country’s full faith and credit should not be used as leverage to extract other partisan priorities.One idea is to set the topline budget numbers but then add a “snap-back” provision to enforce cuts if Congress is unable during its annual appropriations process to meet the new goals.

In one potential development, Republicans may be easing their demand to boost defense spending beyond what Biden had proposed in his budget, instead offering to keep it at his proposed levels, according to another person familiar with the talks.

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