Republican and Democrats in furious negotiations over spending as Congress decides whether to increase the $31.4 TRILLION limit – or 120% the U.S. GDP

Speaker Kevin McCarthy and President Joe Biden are facing a showdown in their first major legislative clash since Republicans took control of the House as they prepare to do battle over whether or not to increase the country’s $31.4 trillion debt limit. 

Treasury Secretary Janet Yellen warned that the U.S. will hit its cap on Thursday, Jan. 19. Once that happens, she will not be able to issue new debt without congressional action. In the meantime, the department will use ‘extraordinary measures’ to keep the government afloat which is expected last until mid-June. 

Once those funds are exhausted, the U.S. will be at risk of defaulting unless Congress and the White House agrees to lift the limit on the government’s ability to borrow.

At issue, the concessions made by McCarthy, who has said that his fellow Republicans will only agree to increase the debt ceiling in return for spending cuts – and a new rule that allows any lawmaker to trigger a vote for McCarthy’s removal could make even the most urgent of votes a dicey matter.

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