Yellen Announces Measures to Prevent U.S. Debt as Debate Over Debt Ceiling Intensifies
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Yellen Moves to Stop U.S. Debt Default as Debate Heats Up |
US Treasury Secretary Janet Yellen announced that her department would take "extraordinary measures" to prevent the country from reaching its debt limit. The announcement came just weeks before the national debt ceiling-estimated at about $36 trillion-is expected to be reached between January 14 and January 23. Yellen, in a letter to Congress, detailed that the measures would include temporarily stopping contributions to civil service retirement accounts. These steps are unprecedented and are aimed at buying time until Congress and the president finally agree on increasing the debt limit. However, she did not say how many such measures might stall a potential default.
The debt ceiling has been raised several times under the Biden administration. More recently, former President Donald Trump called on House Republicans to include another hike in a stopgap spending bill. That measure was opposed and ultimately defeated by several fiscal conservatives in the GOP.
Trump has argued on many occasions that the debt ceiling is not necessary from a practical point of view; it is mainly a psychological restraint. He told NBC News in an interview that he would have no problem abolishing it because this would avoid constant standoffs in Congress over borrowing by the government. Trump said, "The Democrats want to get rid of it. If they want to get rid of it, I would lead the charge."
Scott Bessent, Trump's nominee to succeed Yellen, has signaled his readiness to work with Congress to abolish the debt ceiling, if Trump asked him to.