(The Guardian) US to hit debt ceiling on 19 January, Treasury says, but default months away
The US government will hit the legal limit on how much debt it can carry on 19 January, but it should have enough money to operate until at least early June, Treasury secretary Janet Yellen said Friday.
“I am writing to inform you that beginning on Thursday, January 19, 2023, the outstanding debt of the United States is projected to reach the statutory limit. Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” the secretary wrote in a letter to Republican House speaker Kevin McCarthy.
“While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government’s obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June.”
Republicans in the House have signaled they won’t agree to increase the debt ceiling unless the Biden administration and its Democratic allies in Congress agree to reduce spending, though it remains unclear what areas of the budget the GOP wants to cut. Raising the borrowing limit is one of the few pieces of leverage House Republicans have over the Democrats, but the strategy is not without risks. A failure to increase the ceiling could lead to the United States defaulting on its debt for the first time in its history, likely with serious consequences for the economy.
The US government will hit the legal limit on how much debt it can carry on 19 January, but it should have enough money to operate until at least early June, Treasury secretary Janet Yellen said Friday.
“I am writing to inform you that beginning on Thursday, January 19, 2023, the outstanding debt of the United States is projected to reach the statutory limit. Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” the secretary wrote in a letter to Republican House speaker Kevin McCarthy.
“While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government’s obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June.”
Republicans in the House have signaled they won’t agree to increase the debt ceiling unless the Biden administration and its Democratic allies in Congress agree to reduce spending, though it remains unclear what areas of the budget the GOP wants to cut. Raising the borrowing limit is one of the few pieces of leverage House Republicans have over the Democrats, but the strategy is not without risks. A failure to increase the ceiling could lead to the United States defaulting on its debt for the first time in its history, likely with serious consequences for the economy.
