Treasury Secretary Janet Yellen on Friday warned Congress that her department will need to embark on “extraordinary measures” on August 2 to prevent the U.S. government from defaulting if lawmakers are unable to strike a deal to raise or extend the debt ceiling.
In a letter to House Speaker Nancy Pelosi, Yellen put lawmakers on notice that the Treasury Department will suspend the sale of bonds by the end of July, the avenue by which the U.S. finances its debt obligations.
After August 2, the Treasury would start taking “extraordinary measures” to pay for Congress’ legal and financial obligations, a temporary fix that allows the secretary to tap additional government accounts for a period of weeks.
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