Treasury Secretary Janet Yellen is urging Congress to act as the debt ceiling deadline approaches.
In a letter to Speaker of the House Mike Johnson, Yellen says the government will likely reach its debt limit sometime in January, largely because of obligations related to Medicare payments – forcing the government to take “extraordinary measures” to pay its bills.
The Treasury has previously used the term “extraordinary measures” to refer to suspending investments in certain entitlement programs, pausing sales of Government Series treasury securities and other accounting maneuvers to keep the government running.
Says Yellen,
“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.
I respectfully urge Congress to act to protect the full faith and credit of the United States”
At time of writing, the US national debt is currently at $36.28 trillion. The government spent nearly $1 trillion simply to service the interest on the debt in fiscal year 2024, which ended last year on September 30th, according to the Congressional Budget Office (CBO).
In a recent interview at the Wall Street Journal’s CEO Council Summit, Yellen expressed regret about not being able to improve the US fiscal situation.
“I am concerned about fiscal sustainability, and I am sorry that we haven’t made more progress. I believe that the deficit needs to be brought down, especially now that we’re in an environment of higher interest rates.
For example, over the last year the interest cost of the debt has increased by several hundred billion. It’s one of the largest items responsible for the increase in the budget deficit. And we do need to bring it down. The primary deficit excluding interest is now a little over 3% and I believe it needs to come down.”
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