The US could reach its national debt ceiling on Jan. 19, requiring debt ceilings to be raised or suspended to avoid default, Treasury Secretary Janet Yellen warned in a letter to Congressional leaders that was featured in numerous US media reports.
“Failure from government commitments will irreparably harm the US economy, the livelihoods of all Americans, and global financial stability,” Yellen said in a letter.
The debt ceiling is the statutory limit on the US government’s borrowing from creditors to pay for its existing obligations, including Social Security, medical care, and military salaries. The current limit is currently almost $31.4 trillion.
The Treasury has only a limited amount of time to avoid a default using emergency measures, such as suspending investments in certain government pension funds. According to media estimates, “Day X” may come around the middle of 2023. Yellen said that it is unlikely that the accumulated cash reserves, thanks also to the adoption of emergency measures, will be exhausted before early June.
