Unless Congress acts in the next couple of weeks, Treasury Secretary Janet Yellen has warned, the government will run into its debt limit—which could force "extraordinary measures" to avert defaulting on its debt. The Treasury Department expects to hit the ceiling, the limit on the amount of money that can be borrowed to fund the government, between Jan. 14 and Jan. 23, Yellen said in a letter to House Speaker Mike Johnson. "I respectfully urge Congress to act to protect the full faith and credit of the United States," she wrote, per NBC News.
The measures Yellen referred to basically are accounting moves that keep the government from passing the debt limit. The maneuvers can include halting certain types of investments in savings plans for federal workers, per the New York Times, or health plans for retired postal workers. The debt limit was suspended in June 2023; that suspension expires on Thursday, which would leave the government unable to pay its bills. An estimate by the Bipartisan Policy Center puts the real date when accounting measures could not prevent actual default at sometime in the summer.
Yellen has urged elimination of the limit. Her predecessor under President Trump, Steven Mnuchin, called it a "somewhat ridiculous concept" that doesn't actually curb government spending. The issue was complicated during the congressional struggle to avert a government shutdown last week, when the president-elect lobbied unsuccessfully late in the game for the debt limit to be raised or eliminated. That result suggests the problem will be awaiting Trump when he takes office. (More debt ceiling stories.)
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