Janet Yellen Debt Shocker As Trump Prepares To Take Office

In a move raising eyebrows across Washington, outgoing Treasury Secretary Janet Yellen announced that the United States will hit its debt ceiling on January 21, just one day after President-elect Donald Trump is sworn in. This abrupt announcement places immediate fiscal pressure on the incoming administration.

Yellen informed House Speaker Mike Johnson (R-LA) and other congressional leaders in a formal letter that the Treasury Department will implement “extraordinary measures” to avoid a default. These measures include halting investments in the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund.

“The period of time that extraordinary measures may last is subject to considerable uncertainty,” Yellen stated, urging Congress to act swiftly to safeguard the creditworthiness of the United States.

Criticism of Yellen’s timing was swift, with many suggesting the Biden administration intentionally delayed the announcement to saddle Trump with an economic crisis. Some commentators likened her exit to dropping a fiscal “grenade” on the new administration.

The national debt, now surpassing $36 trillion, has grown under both Republican and Democratic leadership. Rising inflation and higher interest rates have only worsened the government’s financial obligations, driving up borrowing costs.

President-elect Trump has repeatedly called for the abolition of the debt ceiling, describing it as an outdated and harmful constraint on the federal government. His Treasury Secretary nominee, Scott Bessent, has indicated support for Trump’s stance and pledged to work closely with him on the issue if confirmed.

In Congress, House Republicans are weighing strategies to address the debt crisis. The Freedom Caucus proposed raising the debt ceiling by $4 trillion alongside deep spending cuts. Trump reportedly prefers a more aggressive approach but remains open to different solutions.

This surprise announcement thrusts the debt ceiling debate into the spotlight, testing Trump’s leadership just as he returns to the White House.

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