{"id":8715778,"date":"2023-01-13T10:38:48","date_gmt":"2023-01-13T18:38:48","guid":{"rendered":"https:\/\/www.eastbaytimes.com\/?p=8715778&preview=true&preview_id=8715778"},"modified":"2023-01-13T10:46:39","modified_gmt":"2023-01-13T18:46:39","slug":"yellen-tells-congress-us-likely-to-hit-debt-limit-thursday","status":"publish","type":"post","link":"https:\/\/www.eastbaytimes.com\/2023\/01\/13\/yellen-tells-congress-us-likely-to-hit-debt-limit-thursday\/","title":{"rendered":"Yellen tells Congress US likely to hit debt limit Thursday"},"content":{"rendered":"

By Fatima Hussein | Associated Press<\/strong><\/p>\n

WASHINGTON \u2014 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 \u201cextraordinary measures\u201d to avoid default.<\/p>\n

In a letter to House and Senate leaders, Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation\u2019s $31.4 trillion borrowing authority or suspend it again for a period of time.<\/p>\n

Those measures include divesting some payments, such as contributions to federal employees\u2019 retirement plans, in order to provide some headroom to make other payments that are deemed essential, including those for Social Security and debt instruments.<\/p>\n

\u201cFailure to meet the government\u2019s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,\u201d she said. \u201cIndeed, 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.\u201d<\/p>\n

Yellen said that while Treasury can\u2019t estimate how long the extraordinary measures will allow the U.S. to continue to pay the government\u2019s obligations, \u201cit is unlikely that cash and extraordinary measures will be exhausted before early June.\u201d<\/p>\n

Treasury first used these measures in 1985 and has used them at least 16 times since, according to the Committee for a Responsible Federal Budget, a fiscal watchdog. But the extraordinary measures only work for so long, and would probably run out \u2014 and put the U.S. at risk of default.<\/p>\n

Yellen said it is \u201ccritical that Congress act in a timely manner\u201d to increase or suspend the debt limit.<\/p>\n

The debate over raising the debt ceiling will almost certainly result in a political showdown between newly empowered GOP lawmakers who now control the House and President Joe Biden and Democrats, who had enjoyed one-party control of Washington for the past two years.<\/p>\n

In an interview this week on Fox News Channel, new House Speaker Kevin McCarthy stopped short of saying House Republicans would go so far as to refuse to pass the annual spending bills needed to fund the government, as happened more than a decade ago during an earlier debt ceiling showdown in Congress.<\/p>\n

\u201cWe\u2019re going to look at every single dollar spent,\u201d he said.<\/p>\n