You are here: Home » International » News » Economy
Biden understands first-hand impact layoff can have on family: White House
icon-arrow-left
Business Standard

Taking extraordinary steps on debt limit, says US treasury secretary

The government bumped up against its legal borrowing capacity last Thursday, prompting Treasury to take accounting steps regarding federal employees' retirement and health care plans

Topics
US Treasury | Janet Yellen | United States

AP  |  Washington 



Janet Yellen, US Federal Reserve

Secretary sent a letter on Tuesday to congressional leaders saying she's suspending the reinvestment of federal bonds in a government workers' savings plan an additional extraordinary" measure to buy time for President Joe Biden and Congress to raise the nation's debt limit.

The government bumped up against its legal borrowing capacity last Thursday, prompting Treasury to take accounting steps regarding federal employees' retirement and health care plans that will enable the government to stay open until roughly June.

Yellen said in the letter that as of Monday she also determined that the government will be unable to invest fully in the government securities portion of the thrift savings fund in the federal employees' retirement system.

She noted that her predecessors have taken a similar action in the past, noting that by law the accounts will be made whole once the debt limit is increased or suspended.

But it's an open question to how the White House and Congress find common ground on the artificial cap imposed by Congress.

Biden and Republican House Speaker Kevin McCarthy have sharp differences over how to raise the debt ceiling, setting off the possibility of the extraordinary measures being exhausted this summer and risking a government default that could wreak economic havoc.

Senate Republican Leader Mitch McConnell has said the US will not default, but it's unclear how Biden can reconcile his insistence on a clean increase with McCarthy's demand for spending cuts.

White House press secretary Karine Jean-Pierre said at Monday's news briefing that Biden is happy to talk to anyone who wants to deal with deficit reduction in a responsible way.

But Jean-Pierre said that deficit reduction should not be tied to whether the US government pays its bills that are already being incurred.

It must be done without conditions, Jean-Pierre said, adding, President Biden will never will never allow Republicans to cut benefits that our hardworking Americans have earned. This is what they have earned.

McCarthy has yet to outline the scope or the specifics of the cuts that House Republicans would like to see, although any final plan would need to pass the Democratic-controlled Senate and receive Biden's signature.

"Families and businesses have to live within a budget Washington must as well," McCarthy tweeted on Sunday.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Subscribe to Business Standard Premium

Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!

Insightful news, sharp views, newsletters, e-paper, and more! Unlock incisive commentary only on Business Standard.

Download the Business Standard App for latest Business News and Market News .

First Published: Wed, January 25 2023. 07:18 IST

RECOMMENDED FOR YOU

.