Janet Yellen warns 'extraordinary measures' needed to avoid default in January
The notification to Congress is the clearest sign yet that the fight to avoid default will likely take place in the early months of the new Trump administration.
Treasury Secretary Janet Yellen warned congressional leaders Friday that the federal government will hit its debt limit as early as Jan. 14 unless Congress takes action or her department implements “extraordinary measures” to avoid default.
Yellen’s letter indicates that the looming debt ceiling fight involving Congress and the new administration is likely to take place in the early months of next year after President-elect Donald Trump failed to get a provision raising or eliminating the debt ceiling tacked on to an end-of-year spending bill.
“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,” Yellen wrote in her letter, addressed to House Speaker Mike Johnson, R-La.
Secretary of the Treasury Janet Yellen testifies during a Senate Appropriations subcommittee hearing at the U.S. Capitol, in Washington, D.C., on Tuesday, June 4, 2024. Graeme Sloan / Sipa USA / Reuters“I respectfully urge Congress to act to protect the full faith and credit of the United States,” Yellen added.
The dates Yellen cited could shift down the line, pushing the deadline further into 2025. The federal government can often operate for months under the “extraordinary measures” or accounting maneuvers Yellen referenced in her letter.
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