Treasury Secretary Janet Yellen is urging Congress to take action as the debt ceiling deadline approaches.
In one letter Speaking to House Speaker Mike Johnson, Yellen said the government will likely reach its debt limit sometime in January, largely due to obligations related to Medicare payments — forcing the government to take “extraordinary measures” to pay its bills.
The Ministry of Finance has done this before used the term “extraordinary measures” refers to suspending investments in certain entitlement programs, pausing sales of Government Series bonds and other accounting maneuvers to keep the government running.
Says Yellen,
“The Ministry of Finance currently expects to reach the new limit between January 14 and 23. At that point, the Ministry of Finance will have to take extraordinary measures.
I respectfully urge Congress to act to protect the full confidence and credit of the United States”
At the time of writing, the US national debt currently stands at $36.28 trillion. According to the Congressional Budget Office (CBO), the government spent nearly $1 trillion to pay down interest on its debt in the 2024 budget year, which ended on September 30 last year.
In a recent one interview Speaking at the Wall Street Journal’s CEO Council Summit, Yellen expressed regret over his failure to improve the US budget situation.
“I am concerned about fiscal sustainability, and I regret that we have not made more progress. I believe that the budget deficit needs to be reduced, especially now that we are in an environment of higher interest rates.
For example, over the past year, the interest costs of debt have increased by several hundred billion. It is one of the largest items responsible for the increase in the budget deficit. And we have to bring it down. The primary deficit excluding interest is now just over 3% and I think this should be reduced.”
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