The United States is on the brink of hitting its $36 trillion debt limit, as announced by outgoing Treasury Secretary Janet Yellen in a letter to congressional leaders. This milestone is set to occur on Tuesday, prompting the Treasury Department to initiate extraordinary measures to ensure the government can meet its financial obligations.
With just three days left before President-elect Donald Trump assumes office, the pressure is mounting on congressional Republicans to address the looming debt ceiling. Failure to act in a timely manner could lead to a potential default, which would have severe repercussions on the global economy.
Yellen outlined that the extraordinary measures, primarily consisting of accounting maneuvers conducted behind the scenes, will be in effect until March 14. This provides lawmakers with a window of opportunity to devise a strategy to prevent a default and navigate the complex financial landscape.
Despite holding the majority in Congress, Republicans are facing internal divisions on how to tackle the debt ceiling issue. In addition to this pressing matter, they are also juggling multiple legislative priorities such as border security, energy policies, and tax cuts, which may be bundled together for streamlined approval.
Furthermore, legislators are tasked with passing a government funding bill for the fiscal year 2025, which commenced on October 1. The current temporary spending measure is set to expire on March 14, adding another layer of urgency to the ongoing fiscal challenges.
