Treasury Secretary Janet Yellen notified congressional leaders in a letter on Thursday that she is implementing “extraordinary measures” to meet U.S. financial obligations — this after the United States hit the national debt limit of $31.4 trillion, which requires Congress to increase it in order to meet existing national financial obligations.
Yellen wrote to House Speaker Kevin McCarthy: “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States.” According to Yellen, it’s not clear exactly how long government cash and extraordinary measures can work to fulfill the nation’s economic obligations but said it’s unlikely resources will be exhausted “before early June.”
House Republicans have indicated they will demand deep spending cuts before agreeing to raise the debt ceiling; the Biden administration wants the debt ceiling raised without conditions. Yellen warned congressional leadership that failure to raise the limit in time would cause irreparable harm to the U.S. economy. Despite that warning, House Speaker Kevin McCarthy told reporters this week raising the limit without cutting spending is off the table. White House press secretary Karine Jean-Pierre said during a press briefing that Republicans “are threatening to kill millions of jobs and 401(k) plans by trying to hold the debt limit hostage unless they can, again, cut Social Security, cut Medicare, cut Medicaid,” adding that President Biden “will not allow Republicans to take the economy hostage or make working Americans pay the price for their schemes to benefit the wealthiest Americans and also special interests.”
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