Feds will hit debt ceiling day after Trumps inauguration, forcing extraordinary measures: Treasury Secretary

The federal government will hit its debt limit one day after President-elect Donald Trump’s inauguration – at which point “extraordinary measures” will be taken to keep the US from defaulting on its obligations, Treasury Secretary Janet Yellen informed congressional leaders Friday. “This letter serves to notify you, pursuant to 5 U.S.C.§ 8348(l)(2), of the extraordinary measures that Treasury will begin using on January 21,” Yellen wrote in a letter to the leaders of the House and Senate. Yellen, 78, previously warned lawmakers that the government would reach its debt ceiling — the total amount of money the federal government is authorized to borrow to pay for obligations such as Social Security and Medicare benefits — between Jan.

14-23, and that legislative action would be needed to stave off “extraordinary measures” and allow the government to continue paying its bills. In her latest letter, the Biden administration official outlined two out of the ordinary steps the Treasury Department will take soon after Trump is sworn in as the 47th president. “First, I have determined that, by reason of the statutory debt limit, I will be unable to fully invest the portion of the Civil Service Retirement and Disability Fund (CSRDF) not immediately required to pay beneficiaries, and that a ‘debt issuance suspension period’ will begin on Tuesday, January 21, 2025, and last through Friday, March 14, 2025,” Yellen wrote. The former chairwoman of the Federal Reserve noted that debt issuance suspensions have been declared in the past by the Treasury Department “under similar circumstances.” “In addition, because the Postal Accountability and Enhancement Act of 2006 provides that investments in the Postal Service Retiree Health Benefits Fund (PSRHBF) shall be made in the same manner as investments for the CSRDF, the Treasury Department will suspend additional investments of amounts credited to the PSRHBF,” Yellen continued. She asserted�...