Treasury Secretary Janet L. Yellen told lawmakers Friday that the department will be forced to deploy “extraordinary measures” next week to keep from exceeding the $31.4 trillion statutory borrowing cap but that those accounting tools may not last beyond early June.
Yellen’s letter is the starting gun of sorts for potential negotiations between House Republicans, the Senate and administration over what, if any, conditions Democrats might accept in return for raising the debt limit.
After winning control of the House, GOP lawmakers have made clear they intend to extract concessions for a debt limit increase that could include spending cuts, a crackdown on illegal immigration or other measures. Both the White House and congressional Democrats have said they won’t negotiate over the debt limit.
Debt subject to limit, which includes borrowing from the public as well as from government trust funds, stood $78 billion below the borrowing cap as of Wednesday. Congress last raised the debt ceiling in December 2021, by $2.5 trillion.
Beginning Thursday, Yellen wrote, Treasury will reach the $31.4 trillion ceiling and have to start deploying extraordinary measures to remain under the cap.
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