Treasury Secretary Janet Yellen informed lawmakers Tuesday the federal government will reach its debt ceiling by Dec. 15, setting a timeline for what is expected to be a heated debate in Congress over raising the limit.
Yellen’s projection is a slight extension over her initial estimate of Dec. 3. But the Treasury Secretary urged Congress to act quickly to raise the debt ceiling, warning "there are scenarios in which Treasury would be left with insufficient remaining resources to continue to finance the operations of the U.S. government beyond this date."
"To ensure the full faith and credit of the United States, it is critical that Congress raise or suspend the debt limit as soon as possible," Yellen said.
Congressional lawmakers voted along party lines in October to raise the borrowing cap by $480 billion. The short-term fix followed weeks of discord on Capitol Hill. Republicans blocked multiple attempts to raise the ceiling and demanded Democrats use the budget reconciliation process as part of deliberations on President Biden’s sweeping social spending bill.
Senate Minority Leader Mitch McConnell agreed to drop opposition if Democrats approved a debt ceiling hike by a fixed-dollar amount.
Senate Majority Leader Chuck Schumer, D-NY, excoriated Republicans for blocking a bipartisan solution, prompting McConnell to declare the GOP wouldn’t help the Democrats address the debt ceiling when the short-term hike reached its limit in December. Democrats say they won’t use budget reconciliation because it is too complicated and risky.
Yellen and other top economic officials have warned of economic catastrophe if the U.S. government defaults on its debt obligations.