Treasury Secretary Janet Yellen Warns of Dire Consequences if US Fails to Raise Debt Ceiling

The United States has hit its $31.4 trillion debt limit set by Congress, forcing the Treasury Department to start taking extraordinary measures to keep the government paying its bills. Treasury Secretary Janet Yellen warned of the widespread global effects that could be felt if the federal government exhausts these measures and fails to raise the debt ceiling.

Yellen told CNN’s Christiane Amanpour that “the actual date at which we would no longer be able to use these measures is quite uncertain, but it could conceivably come as early as early June.” To avoid a credit default, which would mean the government couldn’t pay its bills and would default on its debt obligations for the first time ever, lawmakers must reach an agreement to either raise or suspend the debt limit.

Suspending the debt limit means Congress freezes it until a specific date and then, as the Committee for a Responsible Federal Budget puts it, “sets an automatic catch-up,” so that when that date arrives, the debt ceiling is raised to meet the current level of spending. Yellen warned that if the debt limit is not raised, everyday Americans could face stark consequences.

The Treasury Department is currently taking extraordinary measures to keep the government paying its bills, but the date at which these measures will no longer be effective is uncertain. It is essential that Congress reaches an agreement to either raise or suspend the debt limit to avoid a credit default and the widespread global effects that could be felt if the federal government exhausts these measures.