The US reached its debt limit of $31.381 quadrillion on Thursday, which is almost two years since it was raised. To avoid a default, the Treasury Department implemented various measures.
In a letter to Congress, Janet Yellen, the Treasury Secretary, said that the country would reach its debt limit on the 19th. However, it’s not clear how Congress will act to address the country’s financial problems.
Because of this, House Republicans have vowed to prevent the country from going over the debt limit again. They also want to make spending cuts in order to reduce the country’s debt.
America will hit the $31 TRILLION debt ceiling today.
That's 120 % of our GDP and $246,876 per taxpayer.
How can anyone believe this is sustainable?
— Stephen Moore (@StephenMoore) January 19, 2023
Press Secretary Jean-Pierre stated that the White House would not negotiate over the debt limit. It also won’t accept conditions that House Republicans would give in exchange for the increase.
The White House and House Republicans now face a crucial question: which side will blink first? The former has stated that it is against any conditions that House Republicans would put on the debt limit increase.
The clock has also started to run on the negotiations between the White House and House Republicans. According to Secretary Janet Yellen, the government’s various measures will only be able to prevent a debt default until at least early June.
Yellen writes McCarthy to lay out the steps ("extraordinary measures") Treasury is taking now that the US is up against its debt ceiling. pic.twitter.com/GSdJh0zHWx
— Josh Wingrove (@josh_wingrove) January 19, 2023
In a letter to House Speaker Kevin McCarthy, Yellen noted that the various measures that the government has implemented could only last for a certain amount of time. She also mentioned the challenges that the country could face in forecasting the future revenue and expenditures of the government. This shows how Washington has become too bureaucratic and wasteful.
In her letter to Congress, Yellen also urged them to act quickly to protect the country’s credit and full faith in its government. However, it seems that they might not be able to do so due to the political stalemate between the White House, and House Republicans.
The preceding is a summary of an article that originally appeared on Town Hall.
