U.S. Hits Debt Ceiling, Setting Up Fight To Raise The Borrowing Limit

Senate To Hold Contentious Vote On Debt Ceiling Limit

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The United States has officially hit the debt ceiling of $31.381 trillion, Treasury Secretary Janet Yellen told Congress in a letter on Thursday (January 19).

Yellen said that the Treasury Department is enacting "extraordinary measures" to ensure the U.S. does not default on its debt. Those measures include cutting contributions to the retirement funds for government employees.

Yellen said the measures would prevent the U.S. from defaulting until early June.

"[T]he period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenge of forecasting the payments and receipts of the U.S. Government months into the future. I respectfully urge Congress to act promptly to protect the full faith and credit of the United States," Yellen wrote.

Congress is unlikely to act anytime soon on raising the debt limit. Republicans control the House of Representatives and are demanding spending massive spending cuts in exchange for raising the borrowing limit.

"If you had your child and you gave him a credit card, and they kept raising it, and they hit the limit, so you've just raised it again, clean increase, and again and again. Would you just keep doing that? Or would you change the behavior?" House Speaker Kevin McCarthy said. "We're six months away? Why wouldn't we sit down and change this behavior so that we would put ourselves on a more fiscally strong position?"

The Democrats have refused to make concessions and want a clean bill to raise the debt ceiling.

"Congress is going to need to address the debt without conditions. And it's just that simple. There should be no hostage-taking here. There should be no attempts to exploit the debt ceiling or to leverage it," White House press secretary Karine Jean-Pierre said earlier in the week.

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