US Treasury Set to Take ‘Extraordinary Measures’ as Debt Limit Looms
Treasury Secretary Janet Yellen warned congressional leaders that the U.S. is projected to reach its debt limit on Jan. 19 amid a brewing standoff on the issue in Congress.
The treasury secretary warned congressional leaders on Friday that the department would begin taking “extraordinary measures” next week, repurposing federal funds to extend the date that the government is expected to run out of money.
The national debt is projected to reach its nearly $31.4 trillion limit on Jan. 19, Treasury Secretary Janet Yellen wrote in a letter to congressional leaders on Friday. And although the department will employ certain measures to avoid a default – which has not occurred in the nation’s history – she warned that the measures are only temporary.
“It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit,” Yellen wrote. “Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all American and global financial stability.”
The letter comes as a debt limit standoff has been brewing in Congress, with some Republicans expressing interest in using the new GOP House majority to seek spending cuts while leveraging the potential default. But House Speaker Kevin McCarthy said during a news conference on Thursday that he and President Joe Biden had a “very good conversation” recently, where he told the president that he’d like to sit down early on to work through the impasse.
“We believe, when it comes to the debt limit, it has been done in a bipartisan way over the years and decades,” White House press secretary Karine Jean-Pierre told reporters on Friday. “And it should be done in a bipartisan way. And it should be done without conditions. This is important here.”
Meanwhile, it remains unlikely that cash and the extraordinary measures will run out before early June, Yellen wrote, while urging Congress to “act promptly.”