Treasury Secretary Sounds Alarm on U.S. Debt Levels
According to Fed chief Janet Yellen, “extraordinary measures” may soon be required to prevent the US federal government from defaulting on its national debt. Read the full article at RT.com.
TroibNews 
US Treasury Secretary Janet Yellen has informed Congress that the federal government may reach its debt limit as soon as January 14 unless action is taken, or the Treasury employs “extraordinary measures” to prevent default.
In a budget deal established in 2023, Congress suspended the debt ceiling—a cap on the amount the US government is allowed to borrow—until January 1, 2025. If no further measures are undertaken, the Treasury will be unable to fulfill all its financial obligations.
In a letter sent to lawmakers on Friday, Yellen indicated that the Treasury anticipates reaching the new limit between January 14 and January 23, at which time special accounting maneuvers would become necessary.
She noted that the current US debt, approximately $36 trillion, is expected to decrease by about $54 billion on January 2 “due to a scheduled redemption of nonmarketable securities held by a federal trust fund associated with Medicare payments.”
The federal government can typically function for several months using ‘extraordinary measures,’ but once these options are exhausted, the risk of default increases if legislators and the president do not agree to raise the borrowing limit.
In her letter, Yellen urged Congress to act “to protect the full faith and credit of the United States.”
The Treasury Secretary's warning follows the recent signing of a funding bill by outgoing US President Joe Biden, which prevented a government shutdown.
This legislation will maintain government funding at current levels through March 14 and includes $100 billion in disaster aid; however, it does not extend the debt limit, a measure that President-elect Donald Trump had requested.
Biden described the agreement as a compromise, noting that “neither side got everything it wanted.”
Trump has expressed support for eliminating the debt ceiling entirely, stating it would be the “smartest thing [Congress] could do.”
Back in June 2023, after extensive negotiations, Congress successfully approved a suspension of the debt limit, which prevented what could have been the nation’s first-ever default.
James del Carmen contributed to this report for TROIB News
In a budget deal established in 2023, Congress suspended the debt ceiling—a cap on the amount the US government is allowed to borrow—until January 1, 2025. If no further measures are undertaken, the Treasury will be unable to fulfill all its financial obligations.
In a letter sent to lawmakers on Friday, Yellen indicated that the Treasury anticipates reaching the new limit between January 14 and January 23, at which time special accounting maneuvers would become necessary.
She noted that the current US debt, approximately $36 trillion, is expected to decrease by about $54 billion on January 2 “due to a scheduled redemption of nonmarketable securities held by a federal trust fund associated with Medicare payments.”
The federal government can typically function for several months using ‘extraordinary measures,’ but once these options are exhausted, the risk of default increases if legislators and the president do not agree to raise the borrowing limit.
In her letter, Yellen urged Congress to act “to protect the full faith and credit of the United States.”
The Treasury Secretary's warning follows the recent signing of a funding bill by outgoing US President Joe Biden, which prevented a government shutdown.
This legislation will maintain government funding at current levels through March 14 and includes $100 billion in disaster aid; however, it does not extend the debt limit, a measure that President-elect Donald Trump had requested.
Biden described the agreement as a compromise, noting that “neither side got everything it wanted.”
Trump has expressed support for eliminating the debt ceiling entirely, stating it would be the “smartest thing [Congress] could do.”
Back in June 2023, after extensive negotiations, Congress successfully approved a suspension of the debt limit, which prevented what could have been the nation’s first-ever default.
James del Carmen contributed to this report for TROIB News
