USA US Treasury Department takes extraordinary measures
The USA has reached its debt limit, meaning that "extraordinary measures" must now be taken to meet payment obligations. This will take place from Tuesday, outgoing Treasury Secretary Janet Yellen announced on Friday.
18.01.2025, 00:34
SDA
As the government is spending more money than it is taking in through taxes, Congress is constantly revisiting the issue. In a letter to the most important representatives of the US Congress, Yellen announced as an "extraordinary measure" that investments in the pension and disability fund for the public sector would be stopped for the time being. Neither the payers nor the recipients would be affected, explained the outgoing Finance Minister.
The debt ceiling is the limit set by Congress on the amount the US government can borrow to meet its obligations. It was last suspended in June 2023, but this period ended on January 1, 2025. On January 2, the debt ceiling was then raised to 36.1 trillion dollars.
Preserving the USA's creditworthiness
However, if the debt ceiling is not raised or suspended again before the Treasury Department's options are exhausted, the USA is threatened with insolvency. "The period for which extraordinary measures can be taken is subject to considerable uncertainty," explained Yellen. Congress must therefore "act immediately" to preserve the creditworthiness of the United States.
On Monday, Republican Donald Trump will run for his second term as US President. In December, he called on Congress to suspend the debt ceiling for at least two more years or abolish it altogether.
