US Treasury Secretary Janet Yellen said her department will need to start taking so-called “extraordinary measures” to prevent the nation from hitting the debt ceiling as early as January 14.
If the US does hit the debt ceiling, the Treasury Department, responsible for ensuring financial security, will not have enough cash on hand to pay back debts.
That’s because the Treasury has to take on debt to make sure it has enough money to pay its bills — which can range from paying for social safety programs to paying interest to investors who have bought government bonds.
Once the US hits the debt ceiling, the Treasury is unable to borrow more money, which could force the country to default on its debt payments. The US has never defaulted on its debt before.
