Yellen Warns 'Extraordinary Measures' Will Be Needed to Avoid Default.

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The Treasury secretary urged Congress to protect the full faith and credit of the United States by raising the debt limit.

'Treasury Secretary Janet L. Yellen informed Congress on Friday that if lawmakers do not act to raise or suspend the nation’s debt limit as soon as Jan. 14 she would most likely need to begin using “extraordinary measures” to prevent the United States from defaulting on its debt.

Ms. Yellen issued her warning about the debt limit — which caps the amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations — at a fractious political moment. Republicans are set to take control of Washington next month, and President-elect Donald J. Trump has already called on Congress to abolish the debt limit before he seeks to push through a new round of tax cuts and other spending priorities.

The debt limit was suspended in June 2023 after a contentious negotiation over federal spending, work requirements for receiving government benefits and funding for the Internal Revenue Service. That suspension is scheduled to expire on Jan. 2, forcing Treasury to begin using so-called extraordinary measures to allow the federal government to keep paying its bills.

Those measures are essentially accounting maneuvers that keep the government from breaching the debt limit.'>>>

https://www.nytimes.com/2024/12/27/business/economy/yellen-debt-limit-warning-congress.html