WASHINGTON, DC – NOVEMBER 21: U.S. Secretary of the Treasury Janet Yellen provides remarks at an occasion celebrating the Group Growth Monetary Establishments FUND (CDFI) on the U.S. Treasury Division on November 21, 2024 in Washington, DC. The U
WASHINGTON – Treasury Secretary Janet Yellen mentioned her company might want to begin taking “extraordinary measures,” or particular accounting maneuvers meant to forestall the nation from hitting the debt ceiling, as early as January 14, in a letter despatched to congressional leaders Friday afternoon.
“Treasury expects to hit the statutory debt ceiling between January 14 and January 23,” Yellen wrote in a letter addressed to Home and Senate management, at which level extraordinary measures can be used to forestall the federal government from breaching the nation’s debt ceiling — which has been suspended till Jan. 1, 2025.
The division has previously deployed what are often called “extraordinary measures” or accounting maneuvers to maintain the federal government working. However as soon as these measures run out the federal government dangers defaulting on its debt until lawmakers and the president comply with elevate the restrict on the U.S. authorities’s means to borrow.
“I respectfully urge Congress to behave to guard the total religion and credit score of america,” she mentioned.
The information comes after President Joe Biden signed a invoice into legislation final week that averted a authorities shutdown however didn’t embody President-elect Donald Trump’s core debt demand to boost or droop the nation’s debt restrict. The invoice was accepted by Congress solely after fierce inner debate amongst Republicans over how one can deal with Trump’s demand. “The rest is a betrayal of our nation,” Trump mentioned in a press release.
After a protracted debate in the summertime of 2023 over how one can fund the federal government, policymakers crafted the Fiscal Duty Act, which included suspending the nation’s $31.4 trillion borrowing authority till Jan. 1, 2025.
Notably nonetheless, Yellen mentioned, on Jan. 2 the debt is projected to briefly lower attributable to a scheduled redemption of nonmarketable securities held by a federal belief fund related to Medicare funds. In consequence, “Treasury doesn’t count on that it is going to be mandatory to start out taking extraordinary measures on January 2 to forestall america from defaulting on its obligations,” she mentioned.
The federal debt at present stands at roughly $36 trillion — which ballooned throughout each Republican and Democratic administrations. And the spike in inflation after the coronavirus pandemic pushed up authorities borrowing prices such that debt service subsequent yr will exceed spending on nationwide safety.
Republicans, who could have full management of the White Home, Home and Senate within the new yr, have massive plans to increase Trump’s 2017 tax cuts and different priorities however debate over how one can pay for them.The federal debt at present stands at roughly $36 trillion — which ballooned throughout each Republican and Democratic administrations. And the spike in inflation after the coronavirus pandemic pushed up authorities borrowing prices such that debt service subsequent yr will exceed spending on nationwide safety.
