Breaking: Treasury Department Begins ‘Extraordinary Measures’ to Avoid Default as U.S. Hits Debt Limit

The U.S. on Thursday hit the debt ceiling set by Congress, setting off a set of special measures from the Treasury Department to avoid default.

Extraordinary measures include delaying some payments, including contributions to federal employees' retirement plans, to free up funds for essential payments such as those for Social Security and debt instruments.

Treasury Secretary Janet Yellen warned last week that the country was on track to max out on its $31.4 trillion borrowing authority on Thursday. The debt limit is the total amount of money the U.S. government is allowed legally to borrow to pay for its existing obligations, "including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments," the treasury secretary noted. 

Without intervention, the government could be left unable to pay its bills by June.

"It is unlikely that cash and extraordinary measures will be exhausted before early June," Yellen wrote in a letter to House Speaker Kevin McCarthy (R., Calif.) last week.

Yellen called on Congress last week to raise the debt ceiling as soon as possible, though it is likely to prove difficult for Congress to hammer out a deal to raise the debt limit, as Republicans control the House, while Democrats control the Senate.

McCarthy and other Republicans have suggested they would not support efforts to raise the debt ceiling unless Democrats agree to cut federal spending. McCarthy on Tuesday said President Biden should begin talks early on the debt ceiling, saying, "Why create a crisis over this?"

However, the White House has said it does not plan to negotiate with the GOP on the debt ceiling and has said Congress shouldn’t attach other policy demands to the raising of the debt limit, according to the Wall Street Journal.

"It is the basic duty of Congress to get that done," White House press secretary Karine Jean-Pierre said Wednesday. "We're talking about the full faith and credit of our country."

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Treasury Department Begins ‘Extraordinary Measures’ to Avoid Default as U.S. Hits Debt Limit

The Treasury Department will delay some payments, including contributions to federal employees' retirement ... READ MORE

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