U.S. Will Begin ‘Extraordinary Measures’ to Stay Under Debt Limit
Treasury warns of ‘irreparable harm’ to global economy as debt limit standoff begins
Next week, the Treasury Department said Friday that it will begin taking "extraordinary measures" to prevent the U.S. government from breaching the debt ceiling and triggering a default, as lawmakers in Washington prepare for a potentially devastating fiscal showdown as soon as this summer.
In a letter to congressional officials, Treasury Secretary Janet L. Yellen said the administration would act beginning Jan. 19 to repurpose federal funds, or else the U.S. government would not be able to borrow to pay its existing bills — an event, she warned, that could trigger a global economic calamity.
The emergency moves would give Democrats and Republicans until at least early June to adopt a law that would raise or suspend the country’s borrowing cap past its current level of $31.4 trillion. Already, that debate has provoked intense political warfare, as House Republicans threaten to use the critical fiscal deadline as leverage to extract spending cuts from the Biden administration.
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