US to max out on debt soon, setting up political fight

WASHINGTON (AP) — The federal government is on track to max out on its $31.4 trillion borrowing authority as soon as this month (Jan. 2023). That starts the clock on an expected standoff between President Joe Biden and the new House Republican majority. Both political parties’ ability to navigate a divided Washington will be tested, with the fragile global economy at stake. Once the cap is hit the Treasury Department will be unable to issue new debt without congressional action. The government could be at risk of defaulting, possibly in mid-summer, unless lawmakers and the Democratic president agree to lift the limit on the U.S. government’s ability to borrow.