U.S. begins ‘extraordinary’ steps to avoid debt ceiling

The Treasury Department says it is taking action to prevent a default that could do “irreparable harm” to the economy.

The Biden administration began “extraordinary measures” Thursday to prevent the federal government from breaching its debt limit and hurtling toward default, a grim scenario with the potential to destabilize markets and devastate the economy.

Treasury Secretary Janet L. Yellen told lawmakers that officials will alter certain federal investments to preserve the nation’s credit until summer — largely through technical moves that will buy lawmakers time to reach an agreement on how much the government is allowed to borrow.

Treasury’s moves should give lawmakers time to pass legislation that raises the amount the country can borrow, or suspends that limit, which is currently capped at $31.4 trillion, Yellen wrote to House Speaker Kevin McCarthy (R-Calif.) on Thursday. But she said there’s “considerable uncertainty” about how much room the measures will provide.

“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” Yellen wrote.

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