Beautiful Virgin Islands


Treasury Secretary Janet Yellen

US treasury secretary Yellen warns of hitting debt cap by June

In a letter, Janet Yellen urged congressional leaders to quickly act to raise the debt ceiling.
US Treasury Secretary Janet Yellen has said the United States will likely hit the $31.4 trillion statutory debt limit on January 19, forcing the Treasury to launch extraordinary cash management measures that can likely prevent default until early June.

“Once the limit is reached, Treasury will need to start taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” Yellen said on Friday in a letter to new Republican House of Representatives Speaker Kevin McCarthy and other congressional leaders.

She urged the legislators to act quickly to raise the debt ceiling to “protect the full faith and credit of the United States”.

“While Treasury is not currently able to provide an estimate of how long extraordinary measures will enable us to continue to pay the government’s obligations, it is unlikely that cash and extraordinary measures will be exhausted before early June,” the letter said.

Republicans now in control of the House have threatened to use the debt ceiling as leverage to demand spending cuts from Democrats and President Joe Biden’s administration. This has raised concerns in Washington, DC and on Wall Street about a bruising fight over the debt ceiling this year that could be at least as disruptive as the protracted battle of 2011, which prompted a brief downgrade of the US credit rating and years of forced domestic and military spending cuts.

The White House said on Friday after Yellen’s letter that it will not negotiate over raising the debt ceiling.

“This should be done without conditions,” White House spokesperson Karine Jean-Pierre told reporters. “There’s going to be no negotiation over it. This is something that must get done.”

The X Date
Yellen’s estimate that the government could pay its bills only through early June without increasing the limit marks a deadline considerably sooner than forecast by some outside budget analysts who said the government would exhaust its cash and borrowing capacity – the so-called “X Date” – sometime in the third quarter of 2023.

Analysts have noted that some Treasury bills maturing in the second half of the year are sporting a premium in their yields that may be tied to an elevated risk of a default in that window.

“You could read this partly as trying to get Congress to act sooner rather than later,” said Bipartisan Policy Center economics director Shai Akabas, adding that Treasury was being conservative in its approach.

Yellen said there was “considerable uncertainty” around the length of time that extraordinary measures could stave off default, due to a variety of factors, including the challenges of forecasting the government’s payments and revenues months into the future.

Pension investments suspended
As of Wednesday, Treasury data showed that US federal debt stood $78bn below the limit, with a Treasury operating cash balance of $346.4bn. The department on Thursday reported an $85bn December deficit as revenues eased and outlays grew, particularly for debt interest costs.

Yellen said in her letter that the Treasury this month anticipates suspending new investments in two retiree funds for government workers’ pensions and healthcare, as well as reinvestments in the Government Securities Investment Fund, or G Fund – part of a savings plan for federal employees. The retirement investments are restored once the debt ceiling is raised.

“The use of extraordinary measures enables the government to meet its obligations for only a limited amount of time,” Yellen wrote to McCarthy and other congressional leaders.

“It is therefore critical that Congress act in a timely manner to increase or suspend the debt limit. Failure to meet the government’s obligations would cause irreparable harm to the US economy, the livelihoods of all Americans, and global financial stability,” Yellen wrote.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Labour Leader Starmer Focuses on Wealth Creation for Upcoming UK Elections
I have a dream, MLK inspiring speech
G7 to Use Frozen Russian Assets for $50 Billion Ukraine Aid
Aretha Franklin, Marvis Staples - Oh Happy Day
Anti-Israel Irish MEP Clare Daly LOST her seat in the EU Election
BVI Freedom Song
Johnson & Johnson Settles Talc Safety Claims for $700 Million
Billy Preston - You Can't Beat God Giving (Live)
EU Urged to Welcome Skilled Russians to Weaken Putin
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
EU Elections Overview: Far-Right Gains and Major Political Shifts
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
Israel Rescues Four Hostages from Gaza
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
Emmanuel Macron Calls for Snap Election
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
Jordan Bardella: Young Far-Right Leader Poised for Future Political Influence in France
Hello Dolly
World's Oldest Privately Owned Book Auctioned for $3.8 Million
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
Animal Rights Activists Deface King Charles' Portrait in Protest
Bob Marley - Get Up Stand Up
Dutch Military Intel Uncovers Extensive Chinese Cyber Espionage
Yes He Can
Turkish Student Arrested for Using AI to Cheat in University Exam
What A Friend We Have In Jesus
Rise in Dengue and Other Mosquito-Borne Diseases in Europe Due to Climate Change
Unforgettable
EU Elections Overview: Far-Right Gains and Major Political Shifts
Touch The Hem Of His Garment
Far-Right National Rally Dominates France's EU Vote
The Lord's Prayer
Macron Calls Snap Legislative Elections After Far-Right Victory
THE GOD MOVEMENT...BEAUTIFUL BVI
Far-Right Gains Significantly in EU Election
Siyahamba
UK Job Market Shows Signs of Recovery
Ray Charles And The Voices Of Jubilaton, Oh, Happy Day
Orban’s Fidesz Party Wins Majority in Hungary’s EU Elections as New Challenger Emerges
Ramblin' Rose
Meloni's Far-Right Party Wins European Elections in Italy
Protoje - Who Knows ft. Chronixx
Key Insights from the European Union Elections
Pressure - Virgin Islands Nice
European Union Elections and Rise of Far-Right Parties
Phil Wickham - House Of The Lord
England Loses Over 260,000 Social Rent Homes in a Decade
My God Is Real (Yes, God Is Real)
Campaigners Urge Government to Block Shein's FTSE Listing
The Lion King Circle of Life by LEBO M. — LIVE at the HAVASI Symphonic
First NHS AI-Run Physiotherapy Clinic Launches This Year
Louis Armstrong - When The Saints Go Marching In
British TV Presenter Michael Mosley Found Dead on Greek Island
Kanye West Sunday Service - hallelujah, salvation, and glory
Ukrainian Forces Claims First Strike on Russia's Su-57 Fighter Jet
Jonathan Nelson - I Believe (Island Medley
Macron Dissolves Parliament and Calls Snap Elections
From The Virgin Islands Sqad Up
Russia Adds Yulia Tymoshenko to Wanted List
Common, John Legend - Glory
UK Foreign Secretary David Cameron Tricked by Hoax Caller Posing as Former Ukrainian President
Anthony Evans vs. Jesse Campbell - If I Ain't Got You
Kate Middleton's Absence from Colonel's Review Due to Chemotherapy
I have a dream, MLK inspiring speech
UK Foreign Secretary Deceived by Prank Video Call
Aretha Franklin, Marvis Staples - Oh Happy Day
Sunak Criticised Over D-Day Exit in BBC Debate
BVI Freedom Song
Rishi Sunak Apologizes for Leaving D-Day Commemoration Early
Billy Preston - You Can't Beat God Giving (Live)
UK Woman Sentenced After Causing Fatal Crash While Sending Selfies
VIRGIN ISLANDS REGGAE CARIBBEAN RIDDIMZ
Danish Prime Minister Mette Frederiksen Assaulted in Central Copenhagen
Oh Happy Day Edwin Hawkins - Anthony Brown w FBCG Combined Choir
UN to Add Israel to Human Rights Blacklist
'Stand by Me' performed by Karen Gibson and The Kingdom Choir
Germany and France Oppose EU Luxury Car Restrictions to Russia
National Anthem of the British Virgin Islands - Oh, Beautiful Virgin
Plus-Sized Miss Alabama Sara Milliken Responds to Online Critics
Hello Dolly
Nigel Farage's Return Boosts Support for Reform UK Party
for KING & COUNTRY - Amen (Reborn) [feat. Lecrae & The WRLDFMS Tony Wi
Labour Party to Pledge Recognition of Palestinian State in Election Manifesto
Bob Marley - Get Up Stand Up
British Paratroopers Greeted by French Customs After D-Day Anniversary Airdrop
Yes He Can
UK Statistics Watchdog Chief Urges Sunak to Clarify Labour Tax Claim Source
What A Friend We Have In Jesus
UK Conservatives Promise to Restore Child Benefit for Higher Earners
Unforgettable
US House Votes to Sanction International Criminal Court
Touch The Hem Of His Garment
British Judges Resign from Hong Kong's Top Court
The Lord's Prayer
Australia Abandons Case on Stabbing Videos Against Elon Musk's Platform
THE GOD MOVEMENT...BEAUTIFUL BVI
Sunak and Starmer Clash Over Tax in Heated TV Debate
Siyahamba
Harry Potter Tourism Sparks Economic Boost in UK
Ray Charles And The Voices Of Jubilaton, Oh, Happy Day
×