US debt ceiling crisis looms as new year begins
The debt ceiling once again is a critical issue for Congress, threatening the nation’s economy with possible default at the beginning of the New Year.
Currently, the U.S. debt stands at a staggering $36.1 trillion.
Without a new debt ceiling agreement, the U.S. risks a default that could destabilize global markets, downgrade its credit rating, and increase economic uncertainty.
President-elect Donald Trump has called for a resolution in the interim budget to address this crisis.
Both parties have managed only a temporary solution, funding the government until March.
Treasury Secretary Janet Yellen emphasized the urgency in a recent letter, marking Jan. 14-23 as the critical window for setting a new debt ceiling.
Trump has criticized former Speaker Kevin McCarthy for deferring the debt issue to future administrations.
As tensions mount, the U.S. faces severe repercussions without swift congressional action.
In early 2023, the U.S. federal government reached a debt ceiling of $31.4 trillion, leading to a crisis.
When the debt ceiling is reached, the federal government cannot borrow more and can only spend cash on hand and its incoming revenue.
In 2011, a spending dispute between former President Barack Obama and the Republicans in Congress led to a prolonged stalemate.
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