General

US hits debt limit, taking ‘extraordinary measures’ to avoid default

The US has hit its debt limit and the Treasury has started using “extraordinary measures” to avoid default, the department’s head said on Thursday.

In a letter to Congress leaders, Treasury Secretary Janet Yellen said a “debt issuance suspension period” will begin Thursday and last through June 5.

She said the department will be unable to fully invest the portion of the Civil Service Retirement and Disability Fund not immediately required to pay beneficiaries.

The Treasury will also suspend additional investments of amounts credited to the Postal Service Retiree Health Benefits Fund, she said, but added that federal retirees and employees will be unaffected by these actions.

“As I stated in my January 13 letter, 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.

“I respectfully urge Congress to act promptly to protect the full faith and credit of the United States,” she added.

Yellen last week urged Congress to suspend or raise the debt limit to avoid default on any obligation of the government, and said the country’s outstanding debt is projected to reach the statutory limit beginning Thursday, which was raised to almost $31.4 trillion on Dec. 16, 2021.

The US government has never defaulted on its debt, while the debt ceiling has been raised a total of 22 times between 1997-2022.

Source: Anadolu Agency