That, at least, is the warning issued by Treasury Secretary Janet Yellen in a Jan. 13 letter to House Speaker Kevin McCarthy, urging Congress to take action to raise the debt ceiling.
“Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” Yellen wrote. But those measures won’t last for very long. “The use of extraordinary measures enables the government to meet its obligations for only a limited amount of time…. It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability,” the secretary stated.
These debt ceiling deadlines frequently become the occasion for much political theater and horse-trading in Washington, D.C., including occasional shut-downs of the U.S. government for a period. But this time, the Washington Post is warning of “the brinkmanship (of) newly empowered conservatives” on the Republican side who are planning to force the adoption of a “payment prioritization plan"—in other words, decide which government bills will be paid, and which not. “Rep. Chip Roy (R-TX), a leading conservative who helped broker the deal [with McCarthy], told the Washington Post that McCarthy agreed to pass a payment prioritization plan by the end of the first quarter of the year.”
