In a letter to House Speaker Kevin McCarthy on Thursday, Treasury Secretary Janet Yellen announced that the agency will start taking “extraordinary measures” now that the US has reached its $31.4 trillion debt limit.
In a letter to House Speaker Kevin McCarthy on Thursday, Treasury Secretary Janet Yellen announced that the agency will start taking “extraordinary measures” now that the US has reached its $31.4 trillion debt limit.
But the nation is not yet at the debt ceiling crisis point that could tank the financial markets, suspend Social Security payments to senior citizens, hurt the economy and cause other chaos.
That’s what the so-called extraordinary measures are designed to temporarily avoid. And while they might sound dire, they are mainly behind-the-scenes accounting maneuvers that the Treasury Department can take to give Congress time to increase or suspend the limit before the US has to default on its debts.
“We’re not in any immediate crisis right now economically,” said Steven Pressman, economics professor at The New School.
But these moves don’t last indefinitely. In the past, they’ve given lawmakers between a few weeks and several months to address the borrowing cap. How much revenue the government collects in tax revenue this spring will also be a factor in how long the country can go before default.
In her letter, Yellen wrote that the extraordinary measures would last through June 5.
