Treasury Secretary Janet Yellen warns of the need for 'extraordinary measures' to avert a U.S. debt default as early as January 14th. The debt ceiling is projected to be reached between January 14th and January 23rd, requiring the Treasury to use accounting maneuvers to prevent default. This comes after a recent bill averted a government shutdown but did not address the debt limit.
U.S. Treasury Secretary Janet Yellen said her agency will need to start taking 'extraordinary measures,' or special accounting maneuvers intended to prevent the nation from hitting the debt ceiling, as early as Jan. 14, in a letter sent to congressional leaders Friday afternoon.
'Treasury expects to hit the statutory debt ceiling between January 14 and January 23,' Yellen wrote in a letter addressed to House and Senate leadership, at which point extraordinary measures would be used to prevent the government from breaching the nation's debt ceiling — which has been suspended until Jan. 1, 2025. The department has in the past deployed what are known as 'extraordinary measures' or accounting maneuvers to keep the government operating. But once those measures run out the government risks defaulting on its debt unless lawmakers and the president agree to lift the limit on the U.S. government's ability to borrow.The news comes after President Joe Biden signed a bill into law last week that averted a government shutdown but did not include President-elect Donald Trump's core debt demand to raise or suspend the nation's debt limit. The bill was approved by Congress only after fierce internal debate among Republicans over how to handle Trump's demand.'Anything else is a betrayal of our country,' Trump said in a statement. After a protracted debate in the summer of 2023 over how to fund the government, policymakers crafted the Fiscal Responsibility Act, which included suspending the nation's $31.4 trillion borrowing authority until Jan. 1, 2025. Notably however, Yellen said, on Jan. 2 the debt is projected to temporarily decrease due to a scheduled redemption of nonmarketable securities held by a federal trust fund associated with Medicare payment
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