The national debt ceiling is currently a top concern for Washington. The United States is set to approach its debt ceiling, or the upper limit on the amount of money the federal government can borrow, by Thursday, Treasury Secretary Janet Yellen said on Friday. In December 2021, the ceiling was last lifted by $2.5 trillion, bringing the total to $31.4 trillion.
Congress has in the past just increased the limit to avoid going over it. However, House Republicans stated that they will not back-raising the debt ceiling this time unless they receive expenditure reductions or other concessions.
The debt ceiling crisis, according to Yellen in a letter to congressional leaders, may hurt the economy and also the stability of the global financial system. She recalled the year 2011, when the United States reached its debt ceiling, upsetting the stock market.
In a stalemate, several things can occur.
To fill the gap in cash flow, the Treasury will start moving money around. These behaviors are only capable of lasting a few weeks or months. If those policies expire, the federal government will struggle to fulfill its responsibilities, such as Social Security and Medicare.
The United States has never so far let a debt go unpaid. But according to Yellen, that could happen as soon as June if Congress does not take action.
