(Washington) The United States could hit its debt ceiling as early as mid-January, Treasury Secretary Janet Yellen said Friday, who urged Congress to “act to protect confidence” in the country and its “ credit “.
Posted yesterday at 7:00 p.m.
Lawmakers suspended the debt ceiling – a limit on government borrowing to pay existing bills – until 1is January 2025.
On January 2, a new limit will be set, corresponding to the amount of debt issued by the Treasury Department.
But the path forward could prove divisive if the United States reaches that new limit, as the thorny issue of raising the cap has sparked growing political tensions for years.
“The Treasury currently expects to reach the new limit between January 14 and 23, when it will have to start taking extraordinary measures,” said Mr.me Yellen in a letter to Republican House Speaker Mike Johnson and other lawmakers.
These extraordinary measures allow the Treasury to continue to finance government activities, and avoid falling behind on paying bills.
According to the minister, the United States will not immediately reach the limit when the ceiling is no longer suspended on January 2, because the country’s outstanding debt is expected to decrease by around $54 billion, thanks to a repayment of titles.
Congress has already raised the cap more than 100 times to allow the government to meet its spending commitments.
But conservatives are generally opposed to increasing the nation’s massive borrowing — which currently tops $36 trillion — and many Republicans have never voted for an increase.
If the debt ceiling is not raised or suspended before the Treasury’s tools are exhausted, the government risks defaulting on its payment obligations, which would have profound repercussions for the world’s largest economy.
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