US Treasury Secretary Janet Yellen has announced that the department will take “extraordinary measures” to prevent the US from exceeding its debt limit on Tuesday, a day after President-elect Donald Trump’s inauguration.
Yellen wrote to Congress that the US is expected to hit its debt ceiling of around $36 trillion between January 14 and 23, which could lead to a default on payments. To avoid this, the Treasury will use accounting tricks, including suspending payments to federal employees’ retirement accounts, until Congress and the President agree to raise the debt limit again. Yellen did not specify how long these measures would prevent a default.
The debt ceiling has been raised three times during the term of President Joe Biden, and Trump has repeatedly called for its abolition, arguing that it is a pointless restriction if it is repeatedly raised. Trump has also said he would take on the issue of the debt limit if the Democrats want to abolish it.
Yellen’s successor, Scott Bessent, has said he would work with Congress to raise the debt limit if tasked by Trump. Bessent also expressed support for strengthening sanctions on Russian oil companies, but added that the current measures might become a tool of coercion if Russia refuses to engage in peace talks with Ukraine or hinders diplomatic efforts by the US.