Treasury Secretary Janet Yellen told lawmakers in a letter Friday that the Treasury Department may need to take “extraordinary measures” by Jan. 14 to prevent the US from defaulting on its debt.
Yellen urged lawmakers in Congress to act “to protect the full faith and credibility of the United States.”
“The U.S. debt is expected to be reduced by approximately $54 billion on January 2, due to scheduled redemptions of non-marketable securities held by a federal trust fund tied to Medicare payments,” he said.
He said: “The Treasury is currently expected to reach the new threshold between January 14 and January 23, at which time it will be necessary for the Treasury to begin taking extraordinary measures.”
Under the 2023 budget deal, Congress suspended debt ceiling By January 1, 2025. The US Treasury will be able to pay its bills for several months, but Congress will have to do so Consider this issue sometime next year,
Failure to act could prevent the Treasury from paying its debts. US debt default is likely to have serious economic consequences.
The debt ceiling is a limit set by Congress on how much money the U.S. government can borrow. Because the government spends more money than it collects in tax revenues, lawmakers need to tackle the issue from time to time – a politically difficult task, since many are reluctant to vote for more debt. Are.
Congress set the first debt limit of $45 billion in 1939, and since then that limit has had to be raised 103 times as spending has consistently exceeded tax revenues. As of October, publicly held debt was 98% of US GDP, compared to 32% in October 2001.
