U.S. Will Hit Debt Limit on Thursday

“The Treasury Department on Friday said that it will begin ‘extraordinary measures’ next week to prevent the United States government from defaulting on its payment obligations, as lawmakers in Washington prepare for a potentially devastating fiscal showdown,” the Washington Post reports.

“In a letter to congressional officials, Treasury Secretary Janet Yellen said the administration would on Jan. 19 begin repurposing federal funds to extend the date by which the government will run out of money. Congress must pass a law raising the debt limit from its current total of $31.4 trillion or the Treasury can’t borrow any more, even to pay for spending lawmakers have already authorized.”

“The U.S. has never defaulted on its debt in its history, and economists warn that doing so could trigger a panic on Wall Street and lead to millions of job losses.”

New York Times: “Ms. Yellen’s letter to Congress was the first sign that resistance by House Republicans to lifting the borrowing cap could put the U.S. economy at risk and signals the beginning of an intense fight in Washington this year over spending and deficits.”