Treasury Secretary Janet Yellen Takes Measures to Ease Debt-Ceiling Woes
Janet Yellen has called on Congress to raise the debt ceiling and avoid a possible default on the federal government’s debt.
Photo:
Yesica Fisch/Associated Press
The Treasury Department will stop fully investing in a government investment vehicle for federal employees as the U.S. bumps up against its debt ceiling, Secretary
Janet Yellen
said Tuesday in a letter to congressional leaders.
The department will hold back money from the Government Securities Investment Fund of the Thrift Savings Fund, known as the “G Fund,” Ms. Yellen said. The G Fund allows government employees to save in interest-bearing U.S. securities as part of their retirement savings.
The step is the latest in a series of so-called extraordinary measures, or accounting maneuvers, the Treasury Department is taking to keep paying the government’s bills. Ms. Yellen outlined other such steps in a letter to lawmakers on Jan. 19.
By law, Treasury can stop investing in the G Fund to avoid breaching the debt limit. Secretaries have taken similar steps in the past to keep the government from hitting its borrowing limit, Ms. Yellen said.
“By law, the G Fund will be made whole once the debt limit is increased or suspended,” she said. “Federal retirees and employees will be unaffected by this action.”
Ms. Yellen said last week that the Treasury would temporarily hold back investments in civil service and Postal Service retirement funds.
On Tuesday, she again urged Congress to raise the debt ceiling. House Republicans are pushing for Democrats to agree to unspecified spending cuts in exchange for authorizing more debt. Democrats, who control the White House and Senate, have rejected that trade, calling for Congress to raise or suspend the debt limit on its own.
The Treasury Department has said emergency measures are expected to allow it to pay all of the nation’s obligations to bondholders, Social Security recipients and others on time until at least June.
Ms. Yellen recently ruled out one idea that some Biden administration officials and Democrats on Capitol Hill had discussed to avoid breaching the debt ceiling. She said the Federal Reserve likely wouldn’t accept a $1 trillion platinum coin if the Biden administration tried to mint one, under an obscure law authorizing platinum coins in the event of a potential default.
Write to David Harrison at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 25, 2023, print edition as ‘Yellen Takes New Action to Remain Under Debt Ceiling.’
Janet Yellen has called on Congress to raise the debt ceiling and avoid a possible default on the federal government’s debt.
Photo:
Yesica Fisch/Associated Press
The Treasury Department will stop fully investing in a government investment vehicle for federal employees as the U.S. bumps up against its debt ceiling, Secretary
Janet Yellen
said Tuesday in a letter to congressional leaders.
The department will hold back money from the Government Securities Investment Fund of the Thrift Savings Fund, known as the “G Fund,” Ms. Yellen said. The G Fund allows government employees to save in interest-bearing U.S. securities as part of their retirement savings.
The step is the latest in a series of so-called extraordinary measures, or accounting maneuvers, the Treasury Department is taking to keep paying the government’s bills. Ms. Yellen outlined other such steps in a letter to lawmakers on Jan. 19.
By law, Treasury can stop investing in the G Fund to avoid breaching the debt limit. Secretaries have taken similar steps in the past to keep the government from hitting its borrowing limit, Ms. Yellen said.
“By law, the G Fund will be made whole once the debt limit is increased or suspended,” she said. “Federal retirees and employees will be unaffected by this action.”
Ms. Yellen said last week that the Treasury would temporarily hold back investments in civil service and Postal Service retirement funds.
On Tuesday, she again urged Congress to raise the debt ceiling. House Republicans are pushing for Democrats to agree to unspecified spending cuts in exchange for authorizing more debt. Democrats, who control the White House and Senate, have rejected that trade, calling for Congress to raise or suspend the debt limit on its own.
The Treasury Department has said emergency measures are expected to allow it to pay all of the nation’s obligations to bondholders, Social Security recipients and others on time until at least June.
Ms. Yellen recently ruled out one idea that some Biden administration officials and Democrats on Capitol Hill had discussed to avoid breaching the debt ceiling. She said the Federal Reserve likely wouldn’t accept a $1 trillion platinum coin if the Biden administration tried to mint one, under an obscure law authorizing platinum coins in the event of a potential default.
Write to David Harrison at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 25, 2023, print edition as ‘Yellen Takes New Action to Remain Under Debt Ceiling.’
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