US Treasury to take measures in mid-January to avoid default on nation’s obligations
Date
12/29/2024 2:39:49 AM
(MENAFN) On Friday, US Treasury Secretary Janet Yellen announced that the Treasury Department would take measures in mid-January to avoid a default on the country's obligations. She explained that, due to these steps, the US debt is expected to temporarily decrease, and as a result, the Treasury will not need to implement extraordinary measures on January 2, as previously anticipated. These measures, which are designed to prevent default, will instead begin between January 14 and January 23, when the debt is projected to reach the new limit.
In a letter addressed to lawmakers, Yellen stated that the US Treasury expects the national debt to reduce by approximately USD54 billion on January 2. This decrease will primarily result from the scheduled redemption of nonmarketable securities, which are held by a federal trust fund tied to Medicare payments. These payments, as part of the federal budget, are a key driver of the debt reduction.
Yellen also emphasized the importance of Congress taking action to ensure the full faith and credit of the United States. Without such action, the country risks facing significant financial challenges, which could have far-reaching consequences for the economy.
The Treasury Secretary’s letter underscores the ongoing challenge of managing the US national debt, a situation that requires careful coordination between the Treasury Department and Congress. As the US approaches its debt limit, the urgency for legislative action becomes increasingly apparent to avoid any potential default.
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