U.S. Treasury Secretary Janet L Yellen reportedly said on Friday that the government has less than three weeks to raise its debt limit.
What Happened: Unless the government raises its debt limit, it will need to take “extraordinary measures” to sustain federal operations starting between Jan. 14 and Jan. 23, Yellen said in a letter to members of Congress, as reported by The Washington Post.
The government is starting to run out of money to finance its debt obligations, she noted while urging Congress to act.
Why It Matters: The debt ceiling refers to the limit of how much the Treasury can borrow. Failing to raise it risks a government default, jeopardizing programs like Social Security, Medicaid, and housing assistance. A default could also spike interest rates, as the U.S. might lose its reputation as a creditworthy borrower.
Earlier this month, President-elect Donald Trump called for either raising or completely eliminating the borrowing limit, a move that could resolve the issue before he assumes office and allow him to pursue his agenda without future debt-ceiling battles.
“Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous Debt Ceiling,” Trump wrote in a Truth Social post. “Without this, we should never make a deal. Remember, the pressure is on whoever is President.”
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