Treasury Secretary Janet L. Yellen cautioned Congress that without action to raise or suspend the debt limit by January 14, she may need to implement extraordinary measures to prevent a default.
The current debt limit, which restricts the government's borrowing capacity, was suspended in June 2023 after intense negotiations regarding federal spending and IRS funding, set to expire on January 2.
Extraordinary measures are a series of accounting tactics that allow the government to maintain operations without breaching the debt limit, such as suspending investments in workers' savings and health plans.
Yellen stressed the necessity for Congress to act promptly, emphasizing the importance of safeguarding the 'full faith and credit of the United States' amidst impending fiscal challenges.
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