Treasury takes another ‘extraordinary’ step on debt limits

WASHINGTON (AP) — U.S. Treasury Secretary Janet Yellen said in a letter to congressional leaders on Tuesday that she was suspending the reinvestment of some federal bonds in employee savings plans.enhance national debt ceiling.

government I exceeded my legal borrowing capacity last ThursdayThis prompted the Treasury Department to take fiscal action on retirement and health care plans for federal employees. This will allow the government to remain open until approximately her June.

In the letter, Yellen said the government had determined, as of Monday, that it “would not be able to fully invest” in the government securities portion of the Thrifty Savings Fund in the retirement plan for federal employees.

She noted that her predecessor had acted similarly in the past, and that by law accounts are “once complete”. debt limit Increase or pause. ”

But how the White House and Congress will find common ground on the artificial cap imposed by Congress is an open question.

Biden and Republican House Speaker Kevin McCarthy have sharp disagreements over how to raise the debt ceiling, and the government’s debt could run out this summer, wreaking havoc on the economy. You run the risk of default.

Senate Republican Leader Mitch McConnell has said the U.S. will not default on its debt, but how Biden reconciles McCarthy’s demands for spending cuts with his insistence on clean increases. It is unknown whether it is possible to

White House Press Secretary Karine Jean-Pierre said at a news briefing on Monday that Biden was “willing to speak to anyone who wants to deal with” the deficit cut “in a responsible way.”

However, Jean-Pierre said deficit reduction should not be tied to whether the U.S. government will pay bills that have already been incurred.

“It must be done unconditionally,” Jean-Pierre said, adding, “President Biden will never allow Republicans to cut the gains earned by hard-working Americans. This is what they got.” am.”

McCarthy has yet to outline the scope or details of the cuts Republicans in the House would like to see, but the final plan would have to pass the Democratic-controlled Senate and get Biden’s signature.

“Families and businesses have to live within budgets, and so must Washington,” McCarthy tweeted Sunday.