Treasury Secretary Janet Yellen indicated that the agency expects to hit the statutory debt ceiling between January 14 and January 23, necessitating 'extraordinary measures' to avoid default.
Yellen urged Congress to take necessary action, stating, 'I respectfully urge Congress to act to protect the full faith and credit of the United States.' This highlights the critical role Congress plays in the nation's fiscal policy.
After intense debate, the Fiscal Responsibility Act was passed, which included the suspension of the nation's borrowing authority until January 1, 2025, demonstrating the contentious nature of budget negotiations.
The debt is projected to temporarily decrease on January 2 due to a redemption of securities, but once extraordinary measures run out, there remains a risk of government default.
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