
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.
Janet Yellen leaves US Treasury in a huff:
Incompetence, malpractice, and childish spite pervade, Janet Yellen's letter to Congress today on the US approaching the $36 Trillion debt limit.
Aside from the US cutting spending, Yellen has $1 trillion of ceiling room she can… pic.twitter.com/6sji0otO0S
— Robert Bowes (@Robert_B_Bowes) January 18, 2025
🚨 BREAKING: Treasury Secretary Yellen announces that the US will hit the debt limit on Tuesday, January 21st.
Yellen has advised the US Treasury to start “extraordinary measures.” https://t.co/Zbx7XoCnzr pic.twitter.com/UFNyTfvHHq
— Financelot (@FinanceLancelot) January 17, 2025
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.
Yellen borrowed another $28 billion yesterday as federal debt climbs to new record high of $34.998 trillion – oh, so close…
$2 billion is basically a rounding error for the treasury at this point, so we're guaranteed to breach $35 trillion in one of next week's daily reports: pic.twitter.com/FipgFeEL5m— E.J. Antoni, Ph.D. (@RealEJAntoni) July 26, 2024
DEBT: On her final day in office, Secretary Yellen dropped a bombshell: the U.S. government would run out of money on President Trump’s first full day in office. Since 2020, the federal debt has ballooned by an astonishing $13 trillion. The so-called resolution of the debt crisis… pic.twitter.com/q9SdrORBiO
— @amuse (@amuse) January 18, 2025
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.
When Joe Biden and Janet Yellen arrived in January 2021, they had $1.6 trillion in cash in the US govt bank acct.
They are leaving Trump with only $600 billion and the debt ceiling preventing Trump's administration from borrowing anything.
This was done intentionally. Yellen… pic.twitter.com/vd1yWD4Uod
— Wall Street Mav (@WallStreetMav) January 13, 2025
This surprise announcement thrusts the debt ceiling debate into the spotlight, testing Trump’s leadership just as he returns to the White House.