WASHINGTON — The U.S. is expected to hit the debt ceiling on Jan. 19, Treasury Secretary Janet Yellen warned in a letter to House Speaker Kevin McCarthy, R-Calif., on Friday.
Beginning on that Thursday, “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 letter said.
Extraordinary measures allow the government to buy time so that Congress can negotiate and pass a debt limit increase. In the letter, Yellen said the measures enable “the government to meet its obligations for only a limit amount of time.” She said that while the Treasury Department can’t identify exactly when the measures will be exhausted, she said, it is “unlikely” that they “will be exhausted before early June.”
“It is therefore critical that Congress act in a timely manner to increase or suspect the debt limit,” she wrote. “Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”
Yellen said that even threats by lawmakers not to raise the debt ceiling have “caused real harms, including the only credit rating downgrade in the history of our nation in 2011.”
Her warning comes just after McCarthy was sworn in as speaker after a lengthy intraparty battle over whether he should take the gavel last week.
Source: | This article originally belongs to Nbcnews.com
