National

Data: U.S. Treasury Department, FactSet; Chart: Thomas Oide/Axios

The U.S. has reached its $31.4 trillion debt ceiling, the Treasury Department announced on Thursday, with no obvious deal in sight. 

Why it matters: The U.S. government runs on a deficit, so the Treasury Department will start "extraordinary measures" to avoid defaulting on government bonds. 

Driving the news: Treasury Secretary Janet Yellen in a letter to Congress said that Treasury was instituting a "debt issuance suspension period" beginning Thursday and running through June 5.

In addition, Treasury will not be able to fulfill certain investments, including to the Civil Service Retirement and Disability Fund.

"As I stated in my January 13 letter, the period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. government months into the future," Yellen stated. 

"I respectfully urge Congress to act promptly to protect the full faith and credit of the United States," she added. 

The big picture: These measures could be exhausted by early summer, Yellen warned last week. 

Congress last raised the debt ceiling in December of 2021, when Democrats held unified control of Congress.

What they're saying: Senate Minority Leader Mitch McConnell (R-Ky.) said Thursday that he is "not concerned with a financial crisis."

"In the end, I think the important thing to remember is that America must never default on its debt. It never has and it never will," McConnell said. 

Senate Majority Leader Chuck Schumer (D-N.Y.), meanwhile, said: "Political brinkmanship with the debt limit would be a massive hit to local economies, American families and would be nothing less than an economic crisis at the hands of the Republicans."

How the debt ceiling is different than a government shutdown

Government shutdowns come when Congress can't get appropriations bills passed before the existing ones expire. 

The most recent shutdown was in 2018-19, and featured a general stoppage of government services, including furloughs for federal workers. 

The debt ceiling requires Congress to raise the threshold to pay for already-appropriated spending. 

Raising the debt limit was generally not a big fight until the 1980s, but there have been repeated standoffs in the years, according to the Congressional Research Service. 

A debt limit impasse in 2011 led to the first downgrade in history on the U.S. federal credit rating. 

How the Treasury Department's extraordinary measures work

The Treasury Department can prioritize payments, including suspending payments to long-term programs for government employees. It can repay the programs after the limit is raised. 

In her letter to Congress last week, Yellen identified the Civil Service Retirement and Disability Fund, Postal Service Retiree Health Benefits Fund and Government Securities Investment Fund as potential avenues for these extraordinary measures.

Democrats control the White House and Senate, but they'll need to strike some sort of deal with House Republicans. 

Status in the House: Some GOP members say they're firmly against any increase to the debt limit. House Speaker Kevin McCarthy said Tuesday he wants to “set a budget, set a path to get us to a balanced budget and let’s start paying this debt off.”

What the White House is saying: “As President Biden has made clear, Congress must deal with the debt limit and must do so without conditions," White House Press Secretary Karine Jean-Pierre said Tuesday.

What to know about extraordinary measures as debt ceiling hits

The U.S. has reached its $31.4 trillion debt ceiling, with no obvious end in sight.

Debt ceiling

Donald Trump

The U.S. has reached its $31.4 trillion <a class="gtmContentClick" data-vars-link-text="debt ceiling" data-vars-click-url="https://www.axios.com/2023/01/17/debt-ceiling-yellen-congress" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/17/debt-ceiling-yellen-congress" target="_self">debt ceiling</a>, the Treasury Department announced on Thursday, with <a class="gtmContentClick" data-vars-link-text="no obvious deal in sight." data-vars-click-url="https://www.axios.com/2023/01/19/debt-ceiling-fight-biden-congress-republicans" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/19/debt-ceiling-fight-biden-congress-republicans" target="_self">no obvious deal in sight.</a> Why it matters: The U.S. government runs on a deficit, so the Treasury Department will start &quot;extraordinary measures&quot; to avoid defaulting on government bonds.

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Sen. Thom Tillis (R-N.C.) is cheering the prospect of multiple candidates entering the GOP's 2024 presidential primaries.

Why it matters: "I think [former President Trump] needs to come before the American people ... and build a case," Tillis said at an Axios News Shapers event on Wednesday.

"On policy trajectories, I had very few differences with President Trump."

"We all have our different styles and personalities, and there were some instances where I disagreed with him, and I've told him that."

Tillis described his state of North Carolina as an important bellwether.

"I think people talk about trending red or trending blue, I really do believe that North Carolina is a purple state and is likely to stay that way for some time."

The big picture: The GOP field is quickly starting to take shape.

Trump is already on the 2024 trail, having announced his bid in November.

Nikki Haley — the former South Carolina governor and ambassador to the UN — is expected to announce her 2024 presidential campaign on Feb. 15 in Charleston, South Carolina, Axios reported Wednesday.

Florida Gov. Ron DeSantis is unlikely to make a final decision about a potential 2024 presidential bid until at least May, Axios reported last month.

GOP senator welcomes contested 2024 presidential primary

"I think Trump needs to come before the American people ... and build a case."

Then-President Trump and Florida Gov. Ron DeSantis in 2020 in Jupiter, Florida. Photo: Joe Raedle via Getty Images 

2024 presidential election

Sen. Thom Tillis (R-N.C.) is cheering the prospect of multiple candidates entering the <a class="gtmContentClick" data-vars-link-text="GOP&#x27;s 2024 presidential primaries" data-vars-click-url="https://www.axios.com/2023/01/24/trump-desantis-polls-2024-presidential-election" data-vars-content-id="8fad2073-fa4e-491a-bf01-584a3baff9d3" data-vars-headline="GOP senator welcomes contested 2024 presidential primary" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/24/trump-desantis-polls-2024-presidential-election" target="_self">GOP&#x27;s 2024 presidential primaries</a>.Why it matters: &quot;I think [former President Trump] needs to come before the American people ... and build a case,&quot; Tillis said at an Axios News Shapers event on Wednesday.

Florida Gov. Ron DeSantis is backing a change at the top of the Republican National Committee in Friday's election, telling conservative activist Charlie Kirk that he likes what he's hearing from challenger Harmeet Dhillon. 

Why it matters: DeSantis is the only candidate currently polling in double digits against former President Trump among Republican voters. 

His support for Dhillon, a lawyer from California, may not swing the RNC chair vote but is a sign that some in the GOP see an opportunity to break with Ronna McDaniel.

"We've had three substandard election cycles in a row," DeSantis told Kirk. 

McDaniel was elected head of the RNC in 2017, overseeing the operation in the 2018, 2020 and 2022 cycles. 

The other side: “I think there's a tendency to scapegoat or ignore the wins,” McDaniel told Semafor earlier in January. 

“I mean, we defied history in 2018, picking up three Senate seats in a midterm year. We picked up 15 seats in 2020 in the House, which was unprecedented, and then this year, winning back the House.”

Between the lines: Some RNC members are publicly expressing concerns about another Trump candidacy in 2024, the New York Times reports. 

The Times said just four of the 168 RNC members fully endorsed Trump, compared to 20 who oppose him and 35 others who want a contested race. (Others didn't reply.)

“This isn’t 2016,” said J. McCauley "Mac" Brown, the chairman of the Republican Party of Kentucky. “People have moved on.”

“Did I vote for Trump in 2016? You bet. Did I vote for him in 2020? You bet ... Now, I don’t know,"  Delaware RNC delegate Hank McCann said.

The bottom line: The RNC's 168 members aren't representative of the broader GOP, Axios' Josh Kraushaar wrote in December. 

Winning the RNC chairmanship is about catering to the interests and whims of at least 85 members — all of whom have agendas that go beyond simply advancing the interests of the Republican Party.

DeSantis calls for "new blood" at RNC

"We've had three substandard election cycles in a row."

Republican National Committee (RNC)

Florida Gov. Ron DeSantis is backing a change at the top of the Republican National Committee in Friday&#x27;s election, telling conservative activist Charlie Kirk that he likes what he&#x27;s hearing from challenger Harmeet Dhillon. Why it matters: DeSantis is the only candidate currently polling in double digits against former President Trump <a class="gtmContentClick" data-vars-link-text="among Republican voters. " data-vars-click-url="https://www.axios.com/2023/01/24/trump-desantis-polls-2024-presidential-election" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/24/trump-desantis-polls-2024-presidential-election" target="_self">among Republican voters. </a>

The U.S. government will reach its debt limit on Jan. 19 and initiate so-called "extraordinary measures" to avoid default, Treasury Secretary Janet Yellen told House Speaker Kevin McCarthy in a letter Friday. 

Why it matters: House Republicans are interested in using debt ceiling negotiations to cut spending, but Yellen said Treasury's extraordinary measures could last until the summer.

"We've got to change the way we're spending money wastefully in this country. And we're going to make sure that happens," House Speaker Kevin McCarthy told reporters on Thursday.

Asked about entitlement reform, McCarthy said Thursday that "as Republicans we will always protect Medicare and Social Security," but did not get into specifics, Axios Pro: Health Care Policy author Peter Sullivan reports. 

Flashback: The debt limit was last raised in December of 2021, and is currently slightly under $31.4 trillion, Bloomberg reports.

Between the lines: Wall Street's reaction to this timeline may play a big role in negotiations, as Axios Macro co-authors Neil Irwin and Courtenay Brown wrote earlier this week:

"As long as markets don't show alarm about a possible debt crisis (and right now they don't), there is less urgency to find a bipartisan path forward. That makes darker scenarios more plausible, such as if the U.S. government were to stop paying some of its bills, or the legal status of newly issued debt came into question."

Editor's note: This story was updated with additional details.

Biden administration warns House GOP about debt ceiling deadlines

Then-House Majority Leader Kevin McCarthy and Rep. Matt Gaetz during the speaker elections earlier in January.

House Republican Leader Kevin McCarthy and Rep. Matt Gaetz during the speaker elections earlier in January. Photo: Jabin Botsford/The Washington Post via Getty Images

The U.S. government will reach its <a class="gtmContentClick" data-vars-link-text="debt limit" data-vars-click-url="https://www.axios.com/2023/01/11/congress-debt-ceiling-risks-could-be-real-this-time" data-vars-content-id="dac3ec61-fa39-41f7-a6e5-faaf409557b7" data-vars-headline="Biden administration warns House GOP about debt ceiling deadlines" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/11/congress-debt-ceiling-risks-could-be-real-this-time" target="_self">debt limit</a> on Jan. 19 and initiate so-called &quot;extraordinary measures&quot; to avoid default, Treasury Secretary Janet Yellen told House Speaker Kevin McCarthy in a <a class="gtmContentClick" data-vars-link-text="letter" data-vars-click-url="https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress-McCarthy-20230113.pdf" data-vars-content-id="dac3ec61-fa39-41f7-a6e5-faaf409557b7" data-vars-headline="Biden administration warns House GOP about debt ceiling deadlines" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress-McCarthy-20230113.pdf" target="_blank">letter</a> Friday. Why it matters: House Republicans are interested in using debt ceiling negotiations to cut spending, but Yellen said Treasury&#x27;s extraordinary measures could last until the summer.

The backstory is now emerging over how Speaker Kevin McCarthy secured the loyalty of Rep. Marjorie Taylor Greene ahead of the most contentious speaker election in a century. 

Why it matters: In less than two years, Greene evolved from calling conversations with McCarthy a "trip to the principal's office" to becoming his most vocal far-right defender, the New York Times' Jonathan Swan and Catie Edmondson report.

Among the revelations from the NYT report:

McCarthy avoided publicly criticizing Greene, choosing instead to have private conversations she referred to as "visits to the principal's office."

McCarthy reportedly took a lesson from former speakers Paul Ryan and John Boehner, deciding it was better to work with the far-right than alienate them. 

One noteworthy example: McCarthy's chief counsel worked for hours to try to overturn Twitter's ban on Greene's personal account in 2022. 

A tipping point for their relationship was when former Rep. Devin Nunes told Greene that McCarthy yelled at Democratic House Majority Leader Steny Hoyer over her removal from committees in 2021.

McCarthy to NYT: “If you’re going to be in a fight, you want Marjorie in your foxhole ... When she picks a fight, she’s going to fight until the fight’s over. She reminds me of my friends from high school, that we’re going to stick together all the way through.”

Greene to NYT: McCarthy's agenda, if he holds firm, "will easily vindicate me and prove I moved the conference to the right during my first two years when I served in the minority with no committees.”

Zoom out: This relationship is already reflected in the GOP agenda.

McCarthy listened to Greene's advice on the coronavirus vaccine mandate for the armed forces, Ukraine spending and public statements about the Jan. 6 Committee, the Times reports.

How Kevin McCarthy won over Marjorie Taylor Greene

“If you’re going to be in a fight, you want Marjorie in your foxhole," McCarthy told the New York Times.

Photo: Bill Clark/CQ-Roll Call, Inc via Getty Images

Kevin McCarthy

The backstory is now emerging over how Speaker Kevin McCarthy secured the loyalty of <a class="gtmContentClick" data-vars-link-text="Rep. Marjorie Taylor Greene" data-vars-click-url="https://www.axios.com/2023/01/04/marjorie-taylor-greene-house-republican-speaker" data-vars-content-id="ff252741-f0fa-45d1-9db3-a4ba8fdba5df" data-vars-headline="How Kevin McCarthy won over Marjorie Taylor Greene" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/04/marjorie-taylor-greene-house-republican-speaker" target="_self">Rep. Marjorie Taylor Greene</a> ahead of the most contentious speaker election in a century. Why it matters: In less than two years, <a class="gtmContentClick" data-vars-link-text="Greene evolved" data-vars-click-url="https://www.axios.com/2022/12/09/marjorie-taylor-greene-maga-congress-mccarthy" data-vars-content-id="ff252741-f0fa-45d1-9db3-a4ba8fdba5df" data-vars-headline="How Kevin McCarthy won over Marjorie Taylor Greene" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/12/09/marjorie-taylor-greene-maga-congress-mccarthy" target="_self">Greene evolved</a> from calling conversations with McCarthy a &quot;trip to the principal&#x27;s office&quot; to becoming his most vocal far-right defender, the New York Times&#x27; Jonathan Swan and Catie Edmondson <a class="gtmContentClick" data-vars-link-text="report" data-vars-click-url="https://www.nytimes.com/2023/01/23/us/politics/kevin-mccarthy-marjorie-taylor-greene.html?partner=slack&amp;smid=sl-share" data-vars-content-id="ff252741-f0fa-45d1-9db3-a4ba8fdba5df" data-vars-headline="How Kevin McCarthy won over Marjorie Taylor Greene" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.nytimes.com/2023/01/23/us/politics/kevin-mccarthy-marjorie-taylor-greene.html?partner=slack&amp;smid=sl-share" target="_blank">report</a>.

Justin Green

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How Kevin McCarthy won over Marjorie Taylor Greene

What to know about extraordinary measures as debt ceiling hits

Biden administration warns House GOP about debt ceiling deadlines