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The secretary of Treasury DepartmentJanet Yellen, decided to take another step Tuesday to temporarily delay the default on the public debt from United States.
Less than a week after announcing that the country had reached its $31.4 trillion debt limit set by Congress, Yellen wrote to House Speaker Kevin McCarthy again Tuesday to tell him that the Treasury continues to take extraordinary measures to allow the government to continue paying its bills on time and stop the catastrophic economic and fiscal consequences of a default.
Treasury will completely stop investing in the Thrift Savings Fund’s Government Securities Investment Fund (G Fund), part of the federal employee retirement system, with US interest-bearing securities.
“I respectfully urge Congress to act expeditiously to protect the full faith and credit of the United States,” Yellen noted in the letter that was sent to Congress.
“The statute that governs the investments of Fund G expressly authorizes the Secretary of the Treasury to suspend the investment to avoid breaching the indebtedness limit,” recalls Yellen about this extraordinary measure.
According to the law, Fund G will be completed once the debt limit is increased or suspended, so retirees and federal employees will not be affected by this action, added the Treasury secretary.
The United States government reached its legal debt limit last Thursday, prompting the Treasury Department to resort to “extraordinary measures” to pay the bills, suspending some payments to federal employee retirement funds and social security for postal employees.
The use of these special financial tools, Yellen recalled, can only be extended until June 5.
The debt limit is the total amount of money the United States government is authorized to borrow to meet its existing legal obligations. and be able to pay Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.
From time to time, the United States peeks into defaulting on the national debt because, unlike other countries, the government can only issue debt up to the limit set by Congress, which has the power to raise that ceiling as it sees fit.
Despite Yellen’s warnings to Congress to act quickly, no progress has been made toward a resolution between House Republicans and the White House.
White House press secretary Karine Jean-Pierre reiterated Monday that the Biden administration is unwilling to negotiate the debt limit, rejecting comments by West Virginia Democratic Sen. Joe Manchin that the position It was a mistake”.
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