WASHINGTON — The United States hit its debt limit on Thursday, prompting the Treasury Department to begin using a series of accounting maneuvers to ensure the federal government can keep paying its bills.
In a letter to Congress, Treasury Secretary Janet L. Yellen said the government would begin using what’s known as “extraordinary measures” to prevent the nation from breaching its statutory debt limit and asked lawmakers to raise or suspend the cap so that the government can continue meeting its financial obligations.
“The period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. government months into the future,” Ms. Yellen said. “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States.”
The milestone of hitting the country’s $31.4 trillion debt cap is the product of decades of tax cuts and increased government spending by both Republicans and Democrats. But at a moment of heightened partisanship and divided government, it is also a warning of the entrenched partisan battles that are set to dominate Washington in the months to come, and that could end in economic shock.
Newly empowered Republicans in the House have vowed that they will not raise the borrowing limit again unless President Biden agrees to steep cuts in federal spending. Mr. Biden has said he will not negotiate conditions for a debt-limit increase, arguing that lawmakers should lift the cap with no strings attached to cover spending that previous Congresses authorized.
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