On the brink of hitting the nation's legal borrowing limit on Thursday, the government is resorting to 'extraordinary measures' to avoid a default. Here's all the information you need to know about the debt limit:
FILE - Treasury Secretary Janet Yellen speaks with reporters during a visit to the Virginia Innovation Partnership Corporation incubator at the Center for Innovative Technology campus in Herndon, Va., Oct. 21, 2022.
In theory, President Joe Biden and Congress are supposed to use that additional time to work out an agreement to raise the nation’s legal $31.38 trillion debt ceiling. These talks often grow heated and go down to the wire, with major economic damage in the balance. But there have been roughly 80 deals to raise or suspend the borrowing cap since the 1960s.
First, the government will temporarily suspend payments to the retirement, disability and health benefit funds for federal employees. Second, it will suspend the reinvestment of maturing government bonds in the retirement savings accounts of government workers. The measures were first deployed in 1985 and have been used at least 16 times since then, according to the Committee for a Responsible Federal Budget, a fiscal watchdog.Before World War I, Congress needed to approve each bond issuance. The debt limit was created as a workaround to finance the war effort without needing a constant series of votes.
“Who wants to put the nation in some type of threat at the last minute of the debt ceiling?” McCarthy said. “Nobody wants to do that. That’s why we’re asking, ‘Let’s change our behavior now. Let’s sit down.’”
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