Treasury Secretary Janet Yellen notified Congress on Friday that the U.S. is projected to reach its debt limit on Thursday.
Treasury Secretary Janet Yellen notified Congress on Friday that the U.S. is projected to reach its debt limit on Thursday and will then resort to "extraordinary measures" to avoid default.
"In the past, even threats that the U.S. government might fail to meet its obligations have caused real harms, including the only credit rating downgrade in the history of our nation in 2011," she said. Yellen was referring to the debt ceiling impasse during Barack Obama's presidency, when Republicans had also just won a House majority.
"We have seen both Republicans and Democrats come together to deal with this issue," White House spokesperson Karine Jean-Pierre told reporters Friday. "It is one of the basic items that Congress has to deal with and it should be done without conditions." But any effort to compromise with House Republicans could force Biden to bend on his own priorities, whether that's money for the IRS to ensure that wealthier Americans pay what they owe or domestic programs for children and the poor.
Yellen said that while Treasury can't estimate how long the extraordinary measures will allow the U.S. to continue to pay the government's obligations, "it is unlikely that cash and extraordinary measures will be exhausted before early June." Treasury first used extraordinary measures in 1985 and has used them at least 16 times since, according to the Committee for a Responsible Federal Budget, a fiscal watchdog.
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