Lawmakers on call over Memorial Day weekend as treasury secretary revises estimate of when US will run out of money

Unless Congress raises the debt ceiling, the US will run out of money to pay its bills by 5 June, the treasury secretary, Janet Yellen, said on Friday as Democratic and Republican negotiators struggled to reach a deal.

Failure to raise the debt celling could trigger a default that could wreak havoc on the economy and global markets. Yellen’s announcement gives negotiators a little more time to come to an agreement.

House adjourned for holiday weekend, but lawmakers could be recalled to vote on deal if agreement is reached

Joe Biden and Republican lawmakers on Thursday appeared to be nearing a deal to cut spending and raise the debt ceiling, with little time to spare to avoid a potential default that could wreak havoc on the economy and global markets.

The deal under consideration by negotiators would raise the government’s $31.4tn debt ceiling for two years while capping spending on most items, a US official told Reuters. It would also increase funding for discretionary spending on military and veterans while essentially holding non-defense discretionary spending at current year levels, the official said.