Yellen Warns Congress ‘Extraordinary Measures’ Have Begun After Debt Ceiling Breached

Treasury Secretary Janet Yellen Members of Congress That she has launched “extraordinary measures” To fund the federal government following the debt ceiling It was impossible to surpass.

The official notified Kevin McCarthy (R. CA), House Speaker, and other lawmakers. letter The debt ceiling is an arbitrary limit placed on the national debt As of Thursday, the statutory limit of $31.381 billion has been exceeded by Congress. Accordingly, she warned lawmakers that all efforts to ensure the solvency and stability of the government are now in effect.

Yellen stated that investments in the Civil Service Retirement and Disability Fund and Postal Service Retiree Health Benefits Fund were temporarily suspended until June 1, clarifying that the actions will not affect federal employees and retirees. “The period of time that extraordinary measures may last is subject to considerable uncertainty,” She informed the lawmakers. “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States.”

In order to maintain discretionary spending and mandatory spending programs, the federal government has depended on substantial budget deficits for many decades. According to the Federal Budget Office, Social Security, Medicare and other health initiatives made up 46% of federal budget in the most recent fiscal year. data The Treasury Department even provides this information maintenance costs The current rise in interest rates across all sectors of the economy has caused the national debt to soar.

Yellen spoke in another language notice Last week “failure to meet the government’s obligations” It would be a cause “irreparable harm” both the domestic and global financial systems. “Presidents and Treasury Secretaries of both parties have made clear that the government must not default on any obligation of the United States,” She went on. “Yet the use of extraordinary measures enables the government to meet its obligations for only a limited amount of time.”

After Republican legislators, the most recent breach of debt ceiling occurred. struck a deal with McCarthy under which the party’s new majority would introduce a budget that refrains from increasing the statutory debt limit. In a dispute, Senate Majority Leader Chuck Schumer and House Minority leader Hakeem Jeffries (both D-NY) argued. statement Fiscal uncertainty is not only the fault of Republicans.

“A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America’s working families on everything from mortgages and car loans to credit card interest rates,” They agreed.

Both Republicans and Democrats have led administrations that have had a massive budget deficit. increases In response to the recession-induced lockdown, lawmakers have approved numerous stimulus packages. This has led to a worsening of shortfalls in recent years. The current national debt stands at $31.5 trillion.

Recent analysis from economists at the University of Pennsylvania’s Wharton School revealed that a 30% decrease in spending or a 40% increase in taxation would be necessary to handle current deficit spending and future obligations. Similar results study According to the Committee for a Responsible Federal Budget, policymakers must enact 26% acrossthe-board spending cuts to balance our budget within the next ten years. In order to balance our budget while exempting programs like Medicare, defense, veteran benefits and Social Security from cuts, all federal spending would need to be reduced by 85%.