The federal government is scheduled to reach the debt ceiling the day after President-elect Donald Trump takes office, at which point “extraordinary measures” will be taken to prevent the U.S. from defaulting on its debt, Treasury Secretary Janet Yellen told Congressional leaders on Friday. I told them.
“This letter provides notice of special measures that the Department of the Treasury will begin taking on January 21st pursuant to 5 USC § 8348(l)(2).” Yellen wrote: he said in a letter to House and Senate leaders.
Yellen, 78, previously said the government would reach the debt ceiling — the amount the federal government is allowed to borrow to pay debts such as Social Security and Medicare benefits — between Jan. 14 and Jan. 23. It warned MPs that action would be needed to avoid “unusual measures” and allow the government to continue paying its bills.
In the latest letter, Biden administration officials outlined two unusual steps the Treasury Department will take immediately after Trump takes office as the 47th president.
“First, I have determined that due to statutory debt limitations, it is not possible to fully invest the portion of the Civil Service Retirement and Disability Fund (CSRDF) that does not require immediate payment to beneficiaries, and I have decided to suspend debt issuance. It has been decided. The “period'' begins on Tuesday, January 21, 2025, and continues through Friday, March 14, 2025,'' Yellen wrote.
The former Fed chairman noted that the Treasury Department has declared a moratorium on debt issuance in the past “under similar circumstances.”
“Additionally, the Postal Responsibility Enhancement Act of 2006 provides that investments in the Postal Service Retirement Health Benefits Fund (PSRHBF) shall be made in the same manner as investments in the CSRDF, so Treasury will “We plan to discontinue our investment in PSRHBF,” Yellen continued.
She argued that both funds would be “full if the debt limit is increased or suspended.”
“Retirees and employees of the federal government are not affected by these actions,” Yellen wrote. .
The national borrowing limit had been suspended from June 2023 until January 1, following the passage of the Fiscal Responsibility Act of 2023, which was negotiated by President Biden and former House Speaker Kevin McCarthy (R-Calif.).
Hardline members of the Republican caucus staunchly opposed successful efforts to suspend the debt ceiling.
Meanwhile, President Trump has already expressed support for completely eliminating the debt ceiling.
Eliminating national debt limits would be the 'smartest thing to do' [Congress] You can do it. I fully support that.” the president-elect told NBC News last month.
“Democrats say they want to get rid of it. If they want to get rid of it, I'll lead the way. It makes no sense other than psychologically,” Trump argued.
His proposal received support from some of his most vocal political opponents, including Sen. Elizabeth Warren (D-Mass.).
Warren: “I agree with President-elect Trump that Congress will eliminate the debt limit and ensure that we never again rule by hostages.'' I wrote to X.
Trump, 78, unsuccessfully lobbied lawmakers last month to include provisions to raise or eliminate the debt ceiling as part of a bill to keep the government funded.
Yellen could not say how long the “temporary measures” would last, but called on lawmakers to address the debt ceiling issue.
“The duration of the extraordinary measures is subject to considerable uncertainty, including the challenge of predicting U.S. government payments and receipts in the months ahead,” she wrote. “While the debt limit does not authorize new spending, it does create a risk that the federal government will be unable to cover existing legal obligations established in the past by Congresses and presidents of both parties.”
“I humbly urge Congress to act quickly to fully protect the trust and credibility of the United States,” Yellen added.
The national debt now exceeds $36 trillion, an increase of about $5 trillion from the time of the 2023 debt ceiling fight.
