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Yellen: Debt limit will be hit day after Trump's inauguration

Treasury Secretary Janet Yellen said Friday that the U.S. will hit the debt ceiling the day after President Trump takes office, and that the Treasury Department will begin “extraordinary steps” to avert the threat of a national debt default.

Yellen said in a letter to Congressional leaders that the Treasury Department would begin taking action on Tuesday after a nearly 20-month suspension of the debt ceiling expired earlier this month.

The Treasury could use this measure to allow the government to meet its debt obligations for a period of time after the debt ceiling deadline is reached. It's unclear when the measure will be in vain, but there has been speculation that it could be months before lawmakers actually raise the debt ceiling.

“The portion of the Civil Servant Retirement and Disability Fund (CSRDF) that does not require immediate payment to beneficiaries cannot be fully invested,” Yellen said.

He also said that a “suspension of government bond issuance” would begin next Tuesday and last until March 14.

“My predecessors declared a moratorium on bond issuance in similar circumstances,” she wrote. “Following these decisions, the Treasury will suspend further investments in the CSRDF and redeem a portion of the investments held by the CSRDF, as expressly permitted by law.”

He said investments in the Postal Retirement Health Benefits Fund would be made in the same way as investments in the CSRDF, but that both accounts would be “fully liquidated if the debt limit is increased or suspended.” said.

“Federal government retirees and employees are not affected by these measures,” she added.

The debt ceiling sets a limit on the amount the Treasury can borrow to pay the nation's bills.

Congress last agreed to suspend the debt ceiling for about a year and a half in 2023 as part of a bipartisan agreement between President Biden and House Republican leadership, which includes It also included limits on expenditures subject to the annual funding process.

But the deal has since drawn criticism from President Trump, who has said the debt limit will need to be addressed when he returns to office.

Yellen said Friday that there is “substantial uncertainty as to how long these extraordinary measures will last,” highlighting the “challenges of predicting U.S. government payments and receipts in the months ahead.”

“While the debt limit does not authorize new spending, it does create a risk that the federal government will be unable to meet existing legal obligations established by Congress and the President in the past.” We will act promptly to fully protect the

The national debt currently exceeds $36 trillion.

With Republicans in control of both houses of Congress and the White House, various sides of the party are working on debt limits, especially as some fiscal hawks seek deep spending cuts and raising the debt ceiling in tandem. We are considering the best method. .

Updated at 6:06 PM ET.

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