Treasury Secretary Janet Yellen is urging Congress to behave because the debt ceiling deadline approaches.
In a letter to Speaker of the Home Mike Johnson, Yellen says the federal government will seemingly attain its debt restrict someday in January, largely due to obligations associated to Medicare funds – forcing the federal government to take “extraordinary measures” to pay its payments.
The Treasury has beforehand used the time period “extraordinary measures” to seek advice from suspending investments in sure entitlement packages, pausing gross sales of Authorities Sequence treasury securities and different accounting maneuvers to maintain the federal government operating.
Says Yellen,
“Treasury at the moment expects to succeed in the brand new restrict between January 14 and January 23 at which era it will likely be crucial for Treasury to begin taking extraordinary measures.
I respectfully urge Congress to behave to guard the complete religion and credit score of america”
At time of writing, the US nationwide debt is at the moment at $36.28 trillion. The federal government spent practically $1 trillion merely to service the curiosity on the debt in fiscal yr 2024, which ended final yr on September thirtieth, in accordance with the Congressional Funds Workplace (CBO).
In a latest interview on the Wall Avenue Journal’s CEO Council Summit, Yellen expressed remorse about not having the ability to enhance the US fiscal state of affairs.
“I’m involved about fiscal sustainability, and I’m sorry that we haven’t made extra progress. I consider that the deficit must be introduced down, particularly now that we’re in an atmosphere of upper rates of interest.
For instance, during the last yr the curiosity price of the debt has elevated by a number of hundred billion. It’s one of many largest gadgets liable for the rise within the price range deficit. And we do have to carry it down. The first deficit excluding curiosity is now just a little over 3% and I consider it wants to return down.”
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