Additional Coverage:
Debt Limit Crisis Looms
Treasury Secretary Janet Yellen has warned that the US faces a debt limit crisis as early as January 14th. In a letter to House Speaker Mike Johnson, Yellen stated that the government will need to take “extraordinary measures” to avoid defaulting on its debt.
The debt limit is a legal limit on how much money the federal government can borrow. It is used to fund essential programs such as Social Security, Medicare, and military salaries. Failure to raise the debt limit could result in the government being unable to pay its bills.
Yellen’s warning comes after Congress failed to extend the debt limit before the end of 2022. Republicans, who will take control of the House in January, have expressed a desire to either raise or eliminate the debt ceiling. However, it remains unclear whether they will be able to reach an agreement with Democrats in the Senate.
Yellen has urged Congress to act swiftly to protect the financial stability of the United States. The debt ceiling crisis has the potential to affect financial markets and increase borrowing costs.