News Desk
ISLAMABAD/WASHINGTON: United States Treasury Secretary Janet Yellen said on Friday warned that the country would likely hit the $31.4 trillion statutory debt limit on January 19, forcing the Treasury to launch extraordinary cash management steps that could likely prevent default until early June.
US default risk
In a letter written to new Republican House of Representatives Speaker Kevin McCarthy, Yellen said that once the debt limit is reached, the Treasury would need to start taking certain extraordinary measures to prevent the US from defaulting on its obligations.
Yellen urged the US lawmakers to act quickly to raise the debt ceiling to “protect the full faith and credit” of the US.
She said that while Treasury was not currently able to provide an estimate of how long extraordinary measures would enable the country to continue to pay the government’s obligations, it was unlikely that cash and extraordinary measures would be exhausted before early June.
Republicans, who now control the US House of Representatives, earlier threatened to use the debt ceiling as leverage to demand spending cuts from rival Democrats and the President Biden administration.
The issue has raised serious concerns in Washington and on Wall Street about a staining fight over the debt ceiling in the current year that could be at least as disruptive as the excruciating battle of 2011, which prompted a brief downgrade of the US credit rating and years of forced domestic and military spending cuts, Reuters said.
On Friday, the White House said after Yellen’s letter that it would not negotiate over raising the debt ceiling.
White House spokesperson Karine Jean-Pierre said that “this should be done without conditions and there was going to be no negotiations over it.”
House Republicans were planning to move a “debt prioritization” measure by the end of March that would call on the US Treasury to continue making certain payments once it reached the debt ceiling, but details have not been finalized.
