Treasury Secretary Janet Yellen said in a letter to Congress Friday that the U.S. is projected to reach its roughly $31.4 trillion borrowing limit—the so-called debt ceiling—on Thursday, January 19.
Beginning on 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.
Yellen noted in the letter that the time bought would be “limited,” and she could not estimate how long it would last. However, she projected it was “unlikely” that the time would “be exhausted before early June.”
But she also warned that if lawmakers failed to act, not raising the debt ceiling could cause “real harms,” pointing out that lawmakers even threatening not to raise the debt ceiling led to “the only credit rating downgrade in the history of our nation in 2011.”
Yellen’s plea comes as House Speaker Kevin McCarthy (R-CA), who recently struggled through a nearly-unprecedented 15 rounds of voting to secure his position, is likely to face Republican backlash against simply raising the debt ceiling.
McCarthy himself has asserted that any action to address the debt ceiling ought to be tied to spending cuts sought by Republicans—cuts that are likely to by rejected by the Democratic-led Senate.
