Treasury Secretary Janet Yellen said in a letter to Congress on Friday that her department does not believe the U.S. will need to take “special measures” on January 2 to avoid defaulting on its obligations, and will instead take new He suggested that he expects it to reach a certain upper limit. From January 14th to 23rd.
“The Treasury currently anticipates that the new cap will be reached between January 14 and January 23, at which point the Treasury will be required to initiate extraordinary measures,” Yellen said in the letter. “There is,” he said.
These actions would move federal funds from certain accounts to pay for immediate expenses and take other steps to ensure the Treasury has enough cash to pay its debts. If the debt ceiling is not raised after funds are exhausted, the United States could be forced to default on its debts, triggering a financial crisis.
Yellen said in her letter that the outstanding debt is expected to decline by about $54 billion, so the department will not need to take any special action on January 2nd, but will instead postpone it to some point by January 14th. He said he thinks it should be done. And 23.
“We respectfully ask Congress to act in full protection of the trust and credit of the United States,” the letter reads.
Yellen's letter comes as President-elect Trump has announced plans to eliminate the debt ceiling, which limits the amount of debt the Treasury can take on by issuing bonds that are widely traded in financial markets. Raising the cap could unlock trillions of dollars in tax cuts that Republicans have been eager to secure.
The president-elect signed three debt ceiling extensions during his first presidential term without reducing the debt.
The issue has primarily been a lever for funding battles among members of Congress over the past two decades.
The president and Congress can raise the debt ceiling by raising it to a certain dollar level or suspending it for a certain period of time. Either option would allow the Treasury to take on as much debt as necessary to pay for expenses already authorized by law, until the debt ceiling is reached or the limit is reimposed.
