Washington (AFP) – Secretary of the Treasury Janet Yellen She said her agency would need to begin taking “extraordinary measures” or special accounting maneuvers aimed at preventing the country from striking… Debt ceilingearly January 14, in a letter sent to congressional leaders Friday afternoon.
“Treasury expects to reach the statutory debt ceiling between January 14 and 23,” Yellen wrote in a letter to House and Senate leadership, at which point extraordinary measures will be used to prevent the government from exceeding the nation’s debt ceiling — which has been suspended until January 1. 2025.
The ministry has in the past deployed what are known as “extraordinary measures” or accounting maneuvers to keep the government functioning. But once those measures run out, the government risks defaulting on its debt unless lawmakers and the president agree to raise the cap on the U.S. government’s ability to borrow.
“I respectfully urge Congress to act to protect the full confidence and trust of the United States,” she said.
This news comes after President Joe Biden Signed the bill into law Last week averted a government shutdown but did not include President-elect Donald Trump’s core Demand for debt To raise or suspend the state’s debt limit. The bill was approved by Congress only afterward Fierce internal debate among Republicans On how to deal with Trump’s request. “Anything else is a betrayal of our country,” Trump said in a statement.
After a lengthy debate in the summer of 2023 about how to finance the government, policymakers drafted the Fiscal Responsibility Act, which included suspending the country’s $31.4 trillion in borrowing authority until January 1, 2025.
However, Yellen said the debt is expected to decrease temporarily on January 2 due to the scheduled redemption of non-marketable securities held by a federal trust fund tied to Medicare payments. As a result, she added, “Treasury does not anticipate that it will be necessary to initiate extraordinary measures on January 2 to prevent the United States from defaulting on its obligations.”
The federal debt currently stands at nearly $36 trillion — which has ballooned across both Republican and Democratic administrations. High inflation after the coronavirus pandemic has also led to government borrowing costs rising such that next year’s debt service will exceed national security spending.
Republicans, who will take full control of the White House, House and Senate in the new year, have big plans to extend Trump’s 2017 tax cuts and other priorities, but are debating how to finance them.
