The U.S. Capitol Building is seen on Jan. 19, 2023, in Washington, D.C. Treasury Secretary Janet Yellen said the U.S. reached its debt limit on Thursday and is resorting to extraordinary measures to avoid defaulting on its debt.
Yellen had already previously warned the U.S. would reach its debt limit on Thursday but had said the Treasury Department was preparing a contingency plan to avoid a default on the country's debt. Raising the debt limit used to be a routine exercise for Congress but it has become increasingly fraught. A potentially huge political fight looms this year as some House Republicans have vowed to block any increase in the debt limit in order to extract spending cuts.
Analysts had previously estimated the debt limit could be reached as early as June with the measures Treasury has taken, but there's considerable uncertainty of exactly when that will happen, as Yellen herself noted on Thursday.
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