The US government is facing a major financial hurdle this Thursday, as the nation is set to reach its debt limit and the Treasury Department is forced to use “extraordinary measures” to avoid defaulting. In order to prevent defaulting, the Treasury Department has been given authority by Congress to temporarily suspend payments to the retirement, disability and health benefit funds for federal employees, as well as suspending the reinvestment of maturing government bonds.

The gravity of the situation is clear, as the US is mere days away from potentially defaulting on its debt and risking a global financial crisis. Despite previous debt limit showdowns, the US has rarely managed to reduce its debt in the long run. For example, a 2011 showdown between congressional Republicans and the Obama administration actually led to the US accumulating more debt in the long run.

This time, President Biden, House Minority Leader Kevin McCarthy and the Democratic Senate must come together to reach an agreement that will raise the debt ceiling and prevent defaulting on Thursday. While McCarthy has publicly stated he would not support a clean debt limit increase, Biden has reportedly been pushing for one, as it would be the most efficient way to avoid a potential global financial crisis.

However, without a bipartisan agreement, it is unclear how the US will meet its debt obligations by Thursday. The Treasury Department has stated that the “extraordinary measures” would run out of money by August, so it is essential that a deal is reached soon.

Overall, the US is currently facing a difficult situation as it approaches its debt limit. By Thursday, President Biden, House Minority Leader Kevin McCarthy and the Democratic Senate must come to an agreement in order to raise the debt ceiling and prevent a potential global financial crisis. It is now up to the US government to make the necessary decisions to avoid defaulting and ensure a secure financial future for the nation.