WASHINGTON — Treasury Secretary Janet Yellen said the department will begin taking special accounting maneuvers on Jan. 19 to avoid breaching the U.S. debt limit, urging lawmakers to boost the ceiling to avert a devastating payments default.
“The period of time that extraordinary measures may last is subject to considerable uncertainty,” Yellen wrote in a letter to bipartisan congressional leaders Friday. Still, “it is unlikely that cash and extraordinary measures will be exhausted before early June,” she said.
The letter kicks off what is likely to be a prolonged, intense political battle over US fiscal policy, a showdown that could strain financial markets and elevate dangers for an economy already facing the risk of recession. Economists expect the Treasury will run out of cash around August if the debt ceiling isn’t boosted.
