Washington — Treasury Secretary Janet Yellen told congressional leaders that the U.S. has hit the limit on the amount of debt it can issue to fulfill its obligations, initiating "extraordinary measures" that will allow the country to avoid a catastrophic default for at least the next few months.

"[T]he 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 wrote in a letter to House Speaker Kevin McCarthy. "I respectfully urge Congress to act promptly to protect the full faith and credit of the United States."

The "extraordinary measures" put a hold on contributions and investment redemptions for government workers' retirement and health care funds, giving the government enough financial space to handle its day-to-day expenses until roughly June.

The expected move comes amid friction between President Biden and House Republicans that has raised alarms about whether the U.S. can sidestep a potential economic crisis.

Yellen wrote that the federal government reached its legal borrowing capacity of $31.381 trillion, an artificially imposed cap that lawmakers have increased roughly 80 times since the 1960s. Even many worried analysts assume there will be a deal.

But this particular moment seems more fraught than past brushes with the debt limit because of the broad differences between Mr. Biden and McCarthy, who presides over a restive Republican caucus.

Those differences increase the risk that the government could default on its obligations for political reasons, a problem that could rattle financial markets and — if not resolved — plunge the world's largest economy into a wholly preventable recession.

The pair have several months to forge a deal, but years of intensifying partisan hostility have led to a conflicting set of demands that jeopardize the ability of the U.S. lawmakers to work together on a basic duty.

Mr. Biden insists on a clean increase to the debt limit so that existing financial commitments can be sustained, refusing to even start talks with Republicans. McCarthy is calling for negotiations that he believes will lead to spending cuts. It's unclear how much he wants to trim and if his fellow Republicans would support any deal after a testy start to the new Congress that required 15 rounds of voting to elect McCarthy speaker.