President-elect Trump's attempt to address the debt ceiling before his term began was unsuccessful. The debt limit will be reinstated on January 2, 2025, requiring the Treasury to utilize extraordinary measures to avoid defaulting on national obligations.
Although President-elect Donald Trump wanted to start 2025 without having to worry about the debt ceiling , he did not get his wish. Addressing the debt ceiling , which will be reinstated on January 2, is still on the list of congressional Republicans’ New Year’s resolutions. The House last week fell far short of passing a two-year extension of the suspension of the limit as part of a GOP-led government spending bill.
Congress ultimately passed a package to fund the federal government into mid-March that did not include Trump’s demand to deal with the debt ceiling. Trump had hoped to address the debt ceiling now in part so it wouldn’t affect the ambitious agenda he wants to get through Congress next year. Also, he wanted it raised on “Biden’s watch,” so President Joe Biden would take any heat for the increase, a move that has proven unpopular with fiscal conservatives in Trump’s party. “If Democrats won’t cooperate on the debt ceiling now, what makes anyone think they would do it in June during our administration?,” he said in a joint statement with Vice President-elect JD Vance last week. Here’s what you need to know about the return of the debt ceiling: What will happen on January 2? Once the debt ceiling is reinstated, the Treasury Department is expected to start using a mix of the cash it has on hand and so-called extraordinary measures to keep paying the federal government’s bills on time and in full. That’s because the nation spends more than it receives in revenue, and it has to borrow to cover the difference. But it can’t once it hits the debt limit. Treasury Secretary Janet Yellen is expected to inform Congress soon that the debt limit has been reached and outline how she will proceed. She also will likely provide lawmakers with an estimate of when these efforts could be exhausted, which could force the nation to default on its obligations for the first time. The US last dealt with a debt ceiling crisis in early 2023, when it hit its $3
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