Senator Minority Leader Mitch McConnell, and Treasury Secretary Janet Yellen. Alex Wong/Getty Images, Greg Nash/Getty ImagesBecause Congress missed an important deadline, Treasury is now paying off the government's bills.Due to GOP resistance, lawmakers were unable to raise or suspend debt ceiling.Treasury uses "extraordinary measures" in order to pay its bills. Congress must act now before it is too late.Check out more stories from Insider's business page.Because Congress missed the July 30 deadline to raise or suspend the debt limit, the Treasury Department began paying the federal government's bills Monday.Janet Yellen, Treasury Secretary, wrote to Congress to say that she is launching what are called "extraordinary measures" in order to keep the federal government afloat. She asked lawmakers to quickly take action to raise or suspend the debt limit, which was set at its maximum on August 1.In a letter, Yellen stated that she respectfully urged Congress to act as quickly as possible to preserve the United States' full faith and credit. In a nonpartisan analysis, the Congressional Budget Office stated that Treasury would have exhausted its special powers by September or October. The US would default on its loans if Congress does not act.A default by the federal government could lead to a chain reaction that causes cash shortages. This could affect bondholders, including those who are US citizens, businesses and other governments. This could lead to an increase in interest rates.Yellen stated that the economic effects of the tax pandemic will have an uncertain impact on the length of "extraordinary measures". She noted last month that raising the debt limit does not encourage more federal spending. It only allows the government to repay what it owes.In a letter to Nancy Pelosi, Yellen stated that "failing to fulfill those obligations would cause irreparable damage to the U.S. economic and the livelihoods for all Americans."In July 2019, President Donald Trump suspended the debt ceiling for two more years. Many Republicans now balk at raising the debt limit while ensuring that Democrats do not cut spending, just as they did under President Barack Obama. Last month, Senate Minority Leader Mitch McConnell suggested that Democrats would need to raise the debt limit on their own.Business Insider has the original article.
