The U.S. government has less than three weeks to raise its debt limit before it will need to take “extraordinary measures” to sustain federal operations, Treasury Secretary Janet L. Yellen said Friday.
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In a letter to members of Congress, Yellen said the government is beginning to run out of money to finance its debt obligations, reflecting one of the challenges facing the incoming Trump administration.
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Yellen’s letter stated that “extraordinary measures” are expected to be needed starting between Jan. 14 and Jan. 23, which is actually somewhat later than originally anticipated. Those measures would probably give Congress several months to act before hitting the borrowing limit.
“I respectfully urge Congress to act to protect the full faith and credit of the United States,” Yellen wrote.
Congress tells the Treasury Department how much it can borrow, a limit known as the “debt ceiling.” Failing to lift the debt limit could have catastrophic consequences for the global economy, as the U.S. government has never before defaulted on its debt obligations.
President-elect Donald Trump tried to get congressional Republicans to suspend the debt limit for two years — or abolish it altogether — in negotiations over funding the government this month. That effort failed, however, and House Speaker Mike Johnson (R-Louisiana) approved legislation to fund the government without changes to the debt limit.
President Joe Biden and former House speaker Kevin McCarthy (R-California) agreed to suspend the debt limit for two years in a bipartisan deal in the spring of 2023.
Johnson could face a difficult time retaining his speakership while lifting the debt ceiling. If GOP leaders try to approve an increase without Democratic support, they would have the narrowest of margins in the House to do so without defections among their right flank. But cutting a deal with Democrats to lift or suspend the debt limit could infuriate the right, whose support Johnson needs to remain speaker.
Get a curated selection of 10 of our best stories in your inbox every weekend.
In a letter to members of Congress, Yellen said the government is beginning to run out of money to finance its debt obligations, reflecting one of the challenges facing the incoming Trump administration.
🏛️
Follow Politics
Yellen’s letter stated that “extraordinary measures” are expected to be needed starting between Jan. 14 and Jan. 23, which is actually somewhat later than originally anticipated. Those measures would probably give Congress several months to act before hitting the borrowing limit.
“I respectfully urge Congress to act to protect the full faith and credit of the United States,” Yellen wrote.
Congress tells the Treasury Department how much it can borrow, a limit known as the “debt ceiling.” Failing to lift the debt limit could have catastrophic consequences for the global economy, as the U.S. government has never before defaulted on its debt obligations.
President-elect Donald Trump tried to get congressional Republicans to suspend the debt limit for two years — or abolish it altogether — in negotiations over funding the government this month. That effort failed, however, and House Speaker Mike Johnson (R-Louisiana) approved legislation to fund the government without changes to the debt limit.
President Joe Biden and former House speaker Kevin McCarthy (R-California) agreed to suspend the debt limit for two years in a bipartisan deal in the spring of 2023.
Johnson could face a difficult time retaining his speakership while lifting the debt ceiling. If GOP leaders try to approve an increase without Democratic support, they would have the narrowest of margins in the House to do so without defections among their right flank. But cutting a deal with Democrats to lift or suspend the debt limit could infuriate the right, whose support Johnson needs to remain speaker.
