U.S. Faces Debt Ceiling Crisis as Federal Borrowing Exceeds Legal Limit

Congress must act to raise the debt ceiling or risk economic turmoil, with Treasury's temporary measures set to expire within months.

The U.S. hit its reinstated debt ceiling of $31.4 trillion on January 1, 2025, with current debt exceeding the limit by nearly $4 trillion.
Treasury Secretary Janet Yellen has implemented 'extraordinary measures' to temporarily manage federal obligations, but these are expected to run out between mid-January and early February.
Failure to raise the debt ceiling could lead to delayed Social Security payments, halted tax refunds, and a government default, which would disrupt global financial markets.
Economists warn that recurring debt ceiling standoffs create unnecessary uncertainty, increase borrowing costs, and risk long-term damage to U.S. creditworthiness.
While some argue the debt ceiling is a necessary check on government spending, others view it as a politically driven mechanism that rarely results in meaningful fiscal reform.