$31.4T

Jan 2023

$31.4

trillion

1993

$4.2T

The US hits its debt ceiling. What happens next?

STALL

Treasury can stave off a default for a few months with temporary “extraordinary measures,” which are largely behind-the-scenes accounting maneuvers.

January 2023

The US begins using these measures. Treasury Secretary Janet Yellen says it's unlikely cash and extraordinary measures will be exhausted before early June.

RAISE

Lawmakers can vote to raise the debt ceiling to a specific amount.

SUSPEND

Lawmakers can temporarily allow Treasury to go over the debt ceiling and borrow what it needs to pay the nation’s bills.

Even if the US doesn't start missing payments, the closer it gets to the deadline, the more it could spook financial markets and raise the risk of America's credit rating being downgraded, which could increase costs for borrowers for years to come.

DEFAULT

Social Security benefits

Payments to 66 million retirees, disabled workers and others could be delayed.

US hurts its position in the global economy

The US dollar could weaken, undermining its central role in world trade.

Recession

A default could trigger an economic downturn, which could result in the loss of millions of jobs.

Stock market

nosedive

Stocks could shed as much as a third of their value, wiping out around $12 trillion in household wealth.

Borrowing costs

A default could increase yields on US Treasuries, raising interest rates on loans, credit cards and mortgages and making it more difficult to get approved for lines of credit.

Federal funding

Federal funding that flows to states and municipalities for Medicaid, highways and education, as well as food stamp benefits and payments to Medicare providers, may not be paid on time.

Federal employees

Paychecks for federal employees and the military, along with payments to federal contractors and veterans benefits, could be delayed.

$31.4T

Jan 2023

$31.4 trillion

1993

$4.2T

The US hits its debt ceiling. What happens next?

STALL

Treasury can stave off a default for a few months with temporary “extraordinary measures,” which are largely behind-the-scenes accounting maneuvers.

January 2023

The US begins using these measures. Treasury Secretary Janet Yellen says it's unlikely cash and extraordinary measures will be exhausted before early June.

RAISE

Lawmakers can vote to raise the debt ceiling to a specific amount.

SUSPEND

Lawmakers can temporarily allow Treasury to go over the debt ceiling and borrow what it needs to pay the nation’s bills.

Even if the US doesn't start missing payments, the closer it gets to the deadline, the more it could spook financial markets and raise the risk of America's credit rating being downgraded, which could increase costs for borrowers for years to come.

DEFAULT

Social Security benefits

Payments to 66 million retirees, disabled workers and others could be delayed.

US hurts its position in the global economy

The US dollar could weaken, undermining its central role in world trade.

Recession

A default could trigger an economic downturn, which could result in the loss of millions of jobs.

Stock market

nosedive

Stocks could shed as much as a third of their value, wiping out around $12 trillion in household wealth.

Borrowing costs

A default could increase yields on US Treasuries, raising interest rates on loans, credit cards and mortgages and making it more difficult to get approved for lines of credit.

Federal funding

Federal funding that flows to states and municipalities for Medicaid, highways and education, as well as food stamp benefits and payments to Medicare providers, may not be paid on time.

Federal employees

Paychecks for federal employees and the military, along with payments to federal contractors and veterans benefits, could be delayed.