Debt-Limit Doomsday Clock: What June Looks Like For U.S. Treasury

(Bloomberg) -- Treasury Secretary Janet Yellen has warned the US is “highly likely” to default in early June if Congress fails to lift or suspend the legal limit for government borrowing.

Here’s a day-by-day guide, beginning June 1, to projected cash flows and other key events. (The estimates for revenue and spending are drawn from analysis by the Bipartisan Policy Center and Goldman Sachs Group Inc.):

June 1

• Yellen has identified this day as the soonest the Treasury could run out of sufficient cash to meet all its obligations
• Estimated payments due: $101 billion, primarily for Medicare, military pay, military and civil service retirement, veterans benefits and supplemental Social Security
• Estimated revenue: $16 billion to $21 billion
• Debt maturities and issuance: $117 billion of T-bills mature, 4-week and 8-week bill auctions

June 2

• Payments: $40 billion — Social Security, Medicaid and Education Department
• Revenue: $13 billion to $14 billion

June 5

• Payments: $13 billion — Medicare, Defense Department vendors and SNAP, also known as the food-stamp program
• Revenue: $20 billion to $21 billion
• Debt maturities and issuance: 13-week and 26-week bill auctions

June 6

• Payments: $17 billion — Medicaid, Defense vendors, Education
• Revenue: $6 billion
• Debt maturities and issuance: $139 billion of T-bills mature, 17-Week bill auction

June 7

• Payments: $16 billion — Defense vendors, Transportation, tax refunds
• Revenue: $14 billion to $19 billion
• Debt maturities and issuance: 17-week bill auction

June 8

• This day is Morgan Stanley’s base case for X-date
• Payments: $18 billion — Medicaid, Defense vendors, Education
• Revenue: $8 billion to $10 billion
• Debt maturities and issuance: $110 billion of T-bills mature, 4-week and 8-week bill auctions

June 9

• Goldman Sachs projects the Treasury’s cash will drop below $30 billion by this date, hitting a level it’s signaled in the past is a crucial minimum
• Payments: $21 billion — federal salaries, Medicaid, Education
• Revenue: $13 billion to $15 billion

June 12

• Payments: $23 billion — Pension Benefit Guaranty Corp., federal salaries, SNAP
• Revenue: $30 billion to $32 billion
• Debt maturities and issuance: 13-week and 26-week bill auctions, $40 billion 3-year and $35 billion 10-year note auctions

June 13

• Payments: $15 billion — Defense vendors, Medicaid, Medicare
• Revenue: $17 billion to $23 billion
• Debt maturities and issuance: $124 billion of T-bills mature, 52-week bill auction and $18 billion 30-year bond auction

June 14

• Payments: $38 billion — Social Security, tax refunds, Medicaid
• Revenue: $44 billion to $45 billion
• Debt maturities and issuance: 17-Week bill auction

June 15

• Payments: $22 billion — military salaries, Medicaid, interest on public debt
• Revenue: $80 billion to $82 billion
• Debt maturities and issuance: $183 billion of T-bills mature, $35 billion cash management bills matures, $45 billion of notes mature, 4-week and 8-week bill auctions

June 16

• Payments: $12 billion — Medicare, Medicaid, Defense vendors
• Revenue: $19 billion to $32 billion

June 20

• Payments: $16 billion — Defense vendors, Education, SNAP
• Revenue: $28 billion to $30 billion
• Debt maturities and issuance: $119 billion of T-bills mature, 13-week and 26-week bill auctions

June 21

• Payments: $40 billion — Social Security, Medicaid, Defense vendors
• Revenue: $21 billion to $28 billion
• Debt maturities and issuance: 17-Week bill auction and $12 billion 20-year bond auction

June 22

• Payments: $26 billion — ACA Marketplace (part of Obamacare), tax refunds, Transportation
• Revenue: $19 billion to $27 billion
• Debt maturities and issuance: $105 billion of notes mature, 4-week and 8-week bill auctions, $19 billion 5-year TIPS auction

June 23

• Payments: $19 billion — federal salaries, Medicare, Veterans Affairs
• Revenue: $17 billion to $18 billion

June 26

• Payments: $17 billion — federal salaries, Medicare, SNAP
• Revenue: $25 billion to $27 billion
• Debt maturities and issuance: 13-week and 26-week bill auctions, $42 billion 2-year note auction

June 27

• Payments: $14 billion — Defense vendors, Medicare, Medicaid
• Revenue: $8 billion
• Debt maturities and issuance: $83 billion of notes mature, $43 billion 5-year note

June 28

• Payments: $40 billion — Social Security, tax refunds, Education
• Revenue: $15 billion to $17 billion
• Debt maturities and issuance: 17-Week bill auction, $35 billion 7-year note auction and $22 billion 2-year floating note auction

June 29

• Payments: $16 billion — Medicaid, Education, federal salaries
• Revenue: $14 billion to $15 billion
• Debt maturities and issuance: $114 billion of notes mature, 4-week and 8-week bill auctions

June 30

• Payments: $98 billion — Medicare, debt interest, veterans benefits, military pay and retirement, supplemental Social Security
• Revenue: $13 billion to $31 billion
• The Treasury will also get an estimated $145 billion of headroom under the debt limit through additional extraordinary accounting measures becoming available
• Debt maturities and issuance: $110 billion of notes mature

Read More: US Default Scenarios Span From Localized Pain to Dimon’s ‘Panic’

--With assistance from Alexandra Harris and Benjamin Purvis.

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