Getty Images
Treasury Secretary Janet Yellen warned congressional leaders on Friday that the U.S. Treasury will require “extraordinary measures” to prevent breaching the debt ceiling.
In her letter, Yellen emphasized the urgency of congressional action to safeguard the nation’s financial stability, The Guardian reported.
“Treasury expects to hit the statutory debt ceiling between January 14 and January 23,” Yellen wrote. She added that extraordinary measures—accounting maneuvers used to keep the government operating—would be necessary to avoid a default.
The U.S. debt limit, suspended until January 1 under the 2023 Fiscal Responsibility Act, will soon be reinstated, leaving Congress to negotiate whether to raise or suspend it further.
“I respectfully urge Congress to act to protect the full faith and credit of the United States,” Yellen said.
The debt, currently at $36 trillion, has surged amid post-pandemic interest rates. Yellen noted that while a temporary reduction in federal obligations on January 2 would delay the need for immediate measures, the Treasury would still require extraordinary actions later in the month.
Yellen’s remarks follow her acknowledgment earlier this month of insufficient progress reducing the national deficit, which she described as a growing concern in an era of higher interest rates. In 2025, debt service is expected to cost the government more than national security spending.
Past “extraordinary measures” have included pausing investments in government worker savings plans and shifting money around temporarily.
Enacting extraordinary measures—or alternatively, passing legislation to raise the debt limit—will require quick cooperation within Congress, which was notably fraught with contention as lawmakers scrambled to pass the legislation to avoid a government shutdown last week.
