WASHINGTON (NEXSTAR) — The Treasury Department is warning Congress that the U.S. is just days away from hitting the debt ceiling. That sets up a likely showdown as lawmakers decide how to raise the country’s debt limits.
On Friday Treasury Secretary Janet Yellen announced the U.S. is set to hit its debt limit on Thursday, Jan. 19.
“America, over time, occasionally hits the debt ceiling because it’s like a credit card limit,” Congressman Steve Scalise said.
Once that happens, the clock starts ticking for lawmakers to raise the debt ceiling or put the country at risk of defaulting. A default could spark a global financial meltdown.
“The debt ceiling should not ever be something we play around with. It is too dangerous,” Congressman Brendan Boyle said.
Many Republicans argue it isn’t fiscally smart or sustainable to just keep raising the limit. House Speaker Kevin McCarthy insists the country needs a better spending plan.
“When does it end? We’ve got to change the way we are spending money wastefully in this country,” McCarthy said.
Republicans’ control of the House gives them more power in negotiations. They say they’ll only agree to a debt increase if it’s linked to cuts in spending.
Congressman Chip Roy promised he won’t back down until the U.S. is on a more financially responsible path.
“I intend to use the debt ceiling to ensure that we get fiscal and structural, reforms,” Roy said.
Democrats worry that will mean cuts to programs like Social Security and Medicare. Congressman Richard Neal said they should start negotiating.
“Better to have the discussion right now, let’s set the table. Let’s get to the debate,” Neal said.
Speaker McCarthy said he’s already brought up the issue with President Biden.
“I told him, I’d like to sit down with him early and work through these challenges,” McCarthy said.
Once the U.S. does hit the debt ceiling, lawmakers will likely only have until this summer before the country defaults.