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January 19, 2023
The Treasury Department announced today it has initiated a series of technical moves known as “extraordinary measures” to avoid a potentially disastrous default on the nation’s debt. These moves are expected to hold the government over at least early June.
Treasury’s announcement puts pressure on Congress to come to agreement on how much the government is allowed to borrow. House Speaker Kevin McCarthy (R-CA) wants major spending cuts included as part of any debt ceiling deal and some Republican lawmakers have suggested changes to entitlement programs as well. House conservatives have also reportedly floated the idea of a payment prioritization plan that would call on the Biden administration to make only the most critical federal payments if Treasury comes up against the statutory limit on what it can legally borrow.
The White House has maintained it will not negotiate on the debt ceiling. Yesterday, White House press secretary Karine Jean-Pierre said, “In the past there has been bipartisan cooperation to address the debt ceiling, and that’s how it should be.”
Asked about the White House stance this week, McCarthy said, “Why create a crisis over this? I mean, we’ve got a Republican House, a Democratic Senate. We’ve got the president there. I think it’s arrogance to say, ‘Oh, we’re not going to negotiate about pretty much anything’ and especially when it comes to funding.”
The United States has never defaulted on its debt, but Treasury Secretary Janet Yellen has repeatedly warned that failure by Congress to address the debt limit would wipe out billions of dollars of economic growth, eliminate millions of jobs and trigger a major panic on Wall Street.
