The day after President Donald Trump takes office, the U.S. Treasury said it will employ “extraordinary measures” to avoid hitting the debt limit.
In a letter, outgoing Treasury Secretary Janet Yellen said extraordinary measures would begin Jan. 21.
Because of that limit, Yellen said she could not fully invest the portion of the Civil Service Retirement and Disability Fund not immediately required to pay beneficiaries, and that a “debt issuance suspension period” would begin Tuesday and last through March 14.
“My predecessors have declared debt issuance suspension periods under similar circumstances,” she wrote. “With these determinations, the Treasury Department will suspend additional investments of amounts credited to, and redeem a portion of the investments held by, the CSRDF, as expressly authorized by law.”
Treasury will also suspend investments in the Postal Service Retiree Health Benefits Fund.
By law, both funds will be made whole once the debt limit is increased or suspended, Yellen said.
The Treasury actions won’t affect federal retirees and employees.
“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. “The debt limit does not authorize new spending, but it creates a risk that the federal government might not be able to finance its existing legal obligations that Congresses and Presidents of both parties have made in the past.”
She asked Congress to act.
“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” she wrote.
The debt limit is the total amount of money the U.S. government is authorized to borrow to meet existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds and other payments.
Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit. Fourty-nine of those times were under Republican presidents and 29 times under Democratic presidents, according to the Treasury Department.
