Treasury Secretary Janet Yellen said Friday she expects the U.S. will officially run up against its borrowing limit in mid- to late-January, starting

Yellen: US will hit debt ceiling in mid- or late-January

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2024-12-29 02:00:06

Treasury Secretary Janet Yellen said Friday she expects the U.S. will officially run up against its borrowing limit in mid- to late-January, starting the clock on a major fiscal challenge facing President-elect Donald Trump in his first months in office.

“Treasury currently expects to reach the new limit between January 14 and January 23, at which time it will be necessary for Treasury to start taking extraordinary measures,” Yellen wrote in a letter to congressional leadership.

The debt limit has been suspended since June 2023 when Congress passed a bipartisan deal reached between then-House Speaker Kevin McCarthy and President Joe Biden. Under that law, the limit on Treasury’s ability to issue debt to cover the nation’s bills returns on Jan. 2.

But Yellen explained in her letter that Treasury has some extra leeway until sometime between Jan. 14 and Jan. 24, largely due to the timing of debt payments associated with a Medicare trust fund. At that point, Yellen said, Treasury will begin using special accounting procedures to avoid defaulting on the nation’s debt.

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