Yellen says Treasury will use 'extraordinary measures' on Jan. 21 to prevent hitting debt ceiling
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In one of her last acts as Treasury Secretary, Janet Yellen said her agency will start taking “extraordinary measures,” or special accounting maneuvers intended to prevent the nation from hitting the debt ceiling, on January 21, in a letter sent to congressional leaders Friday afternoon.
She sent a letter in late December to lawmakers stating that Treasury expected to hit the statutory debt ceiling between January 14 and January 23. And now, the agency will stop paying into certain accounts, including the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund, to make up for the shortfall in money.
The department has in the past deployed what are known as “extraordinary measures,” or accounting maneuvers, to keep the government operating. But once those measures run out, the government risks defaulting on its debt unless lawmakers and the president agree to lift the limit on the U.S. government’s ability to borrow.
“The period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. Government months into the future,” Yellen wrote in a letter addressed to House and Senate leadership.
“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” she said. When the debt limit is raised or suspended those funds will be paid back and federal retirees and workers won't be affected by the actions.
