Treasury Secretary Janet Yellen has alerted Congress that the U.S. government is nearing its debt limit and faces a potential default as early as January 14th. She emphasizes the need for immediate action to avert this crisis.
Treasury Secretary Janet Yellen warned congressional leaders Friday that the federal government will hit its debt limit as early as Jan. 14 unless Congress takes action or her department implements “extraordinary measures” to avoid default.
Yellen’s letter indicates that the looming debt ceiling fight involving Congress and the new administration is likely to take place in the early months of next year after President-elect Donald Trump failed to get a provision raising or eliminating the debt ceiling tacked on to an end-of-year spending bill. “Treasury currently expects to reach the new limit between January 14 and January 23, at which time it will be necessary for Treasury to start taking extraordinary measures,” Yellen wrote in her letter, addressed to House Speaker Mike Johnson, R-La. “I respectfully urge Congress to act to protect the full faith and credit of the United States,” Yellen added. The dates Yellen cited could shift down the line, pushing the deadline further into 2025. The federal government can often operate for months under the “extraordinary measures” or accounting maneuvers Yellen referenced in her letter. The debt ceiling, or the total amount of money the government can borrow to meet its fiscal obligations, is suspended until Jan. 1, following passage of the Fiscal Responsibility Act of 2023 that was signed into law by President Joe Biden. Once the U.S. hits the debt ceiling, the government cannot borrow any more money and technically defaults, leaving it unable to pay bills unless the president and Congress negotiate a way to lift a limit on the ability to borrow. As the government faced an ultimately averted shutdown last week, one of the issues Congress debated was increasing or even eliminating the debt ceiling. The federal debt stands at roughly $36 trillio
Finance DEBT CEILING GOVERNMENT DEFAULT JANET YELLEN CONGRESS FISCAL RESPONSIBILITY
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