The US Treasury has warned about reaching the national debt limit already this month
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The United States will probably reach the established limit of the national debt of $31.4 trillion on January 19, 2023, which will force the Ministry of Finance to take extraordinary cash management measures that can prevent a default by the beginning of June. This was announced by Finance Minister Janet Yellen, Reuters reports.
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“When the limit is reached, the Department will need to begin taking certain emergency measures to prevent the United States from defaulting on its obligations,” Ellen said in a letter to incoming Republican House Speaker Kevin McCarthy and other congressional leaders.
The letter states that the US Treasury cannot yet estimate how long emergency measures will allow the government to continue paying its obligations. In addition, it is unlikely that cash and emergency measures will be exhausted by the beginning of June.
It is noted that the ministry’s estimate that the government will be able to pay its bills only by the beginning of June without increasing the limit means the deadline is much earlier than the forecasts of some external budget analysts that the government will exhaust its funds and borrowing opportunities somewhere in the third quarter of the calendar year. . 2023 year.
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It is added that the Republicans, who now control the House of Representatives, threatened to use the debt ceiling as a lever to demand spending cuts from the Democrats and the administration of US President Joe Biden.
Washington and Wall Street are concerned about a possible tough fight over the debt ceiling this year, which can be at least as destructive as the protracted fight in 2011, which led to a short-term downgrade of the US credit rating and years of forced domestic and military spending cuts.
Source: Ministry of Finance
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