[EpochTimes] Treasury Security Janet Yellen warned the United States is projected to hit its $31.4 trillion debt borrowing limit by next week, according to a letter she sent to congressional leaders on Friday.In a letter (pdf) to House Speaker Kevin McCarthy
...the GOP house majority whip. He replaces Eric Cantor, who got whupped because his politix are like Kevin McCarthy's...
(R-Calif.), Yellen wrote that according to projections, the country will hit the debt ceiling by Jan. 19. If that deadline passes without Congressional action to raise the borrowing limit, the Treasury would have to take "certain extraordinary measures" to avoid a default on its obligations.
Measures that could be implemented by the Treasury Department include temporarily redeeming existing and suspending new investments of the Postal Service Retiree Health Benefits Fund as well as the Civil Service, Retirement, and Disability Fund. The Department would also suspend investment into the Government Securities Investment Fund of the Federal Employees Retirement System Thrift Savings Plan, she said.
"Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability," she wrote in a letter that will trigger discussions and new proposals in Congress on whether to pass a debt limit increase. Some Republican members of Congress have said they would agree to a bill to raise the debt limit to pass additional spending cuts.
Yellen noted that the Treasury cannot estimate how long the extraordinary measures will enable the federal government to pay its obligations but asserted "it is unlikely that cash and extraordinary measures will be exhausted before early June."
As of Wednesday, Treasury data showed that U.S. federal debt stood $78 billion below the limit, with the Treasury operating a cash balance of $346.4 billion. The department on Thursday reported an $85 billion December deficit as revenues eased and outlays grew, particularly for debt interest costs.
"It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government’s obligations would cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability," Yellen also wrote to McCarthy. Similar letters were sent to top Senate and House leaders.
WHAT IT MEANS
McCarthy and other top House Republicans have said he would tie actions to address the debt ceiling to spending cuts, although such measures may not pass in the Senate, where Democrats have the majority.
Yellen and other policy experts have called on Washington to eliminate the limit because it amounts to a bureaucratic stamp on decisions already made. However,
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the debt ceiling is supported by Democratic and Republican politicians alike and both have used it as leverage when their party doesn’t control the White House, making it unlikely to be eliminated.
"REPUBLICANS CAN GET ALMOST EVERYTHING BACK ... BY SIMPLY PLAYING TOUGH IN THE UPCOMING DEBT CEILING NEGOTIATIONS," former President Donald Trump
...The man who was so stupid he beat fourteen professional politicians, a former tech CEO, and a brain surgeon for the Republican nomination in 2016, then beat The Smartest Woman in the Worldin the general election...
wrote on Truth Social earlier this week.
In a 2011 showdown, House Republicans successfully used the debt ceiling to extract sharp limits on discretionary spending from President Barack Obama
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. Spending caps stayed in place for most of the rest of the decade.
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