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Updated October 19th, 2021 at 18:08 IST

US Treasury Dept stresses need for 'extraordinary measures' to avoid breach of debt limit

US Treasury Dept Secy Janet Yellen asserted the need to continue "extraordinary measures" through Dec 3 as the new limit provided "only a temporary reprieve."

Reported by: Dipaneeta Das
US
Image: AP | Image:self
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In a letter to US House Speaker Nancy Pelosi, the United States Treasury Department Secretary, Janet Yellen asserted the need to continue using "extraordinary measures" through December 3 since the recent increase in the debt limit provided "only a temporary reprieve" to a prospective default. Yellen's letter comes on the heels of Congress's measure to help the government sail through the term without breaching the debt limit.

While the debt ceiling increase can keep the government sailing through December 3, "it is imperative that Congress act to increase or suspend the debt limit in a way that provides longer-term certainty that the government will satisfy its obligations," Yellen noted in her letter on Monday. She urged Congress to act so as to protect the "full faith and credit" of the United States. 

Extraordinary Measures

Earlier, Yellen notified the US House of continuing the Debt Issuance Suspension Period (DISP) through October 18, 2020. However, following the current measure, the Treasury has decided to hold off investments in the Civil Service Retirement and Disability Fund (CSRDF) to beneficiaries. Similarly, as determined by the Treasury Secretary, the investment rules will also be applicable for the Postal Accountability and Enhancement Act that provides investment in the Postal Service Retiree Health Benefits Fund (PSRHBF). The recipients will be deprived of the benefits until the debt ceiling is increased or suspended beyond December 3. Moreover, she added that the Treasury will also extend the suspension of the sale of State and Local Government Series securities, which was initially announced on July 23, 2021.

Joe Biden signs bill raising the Debt ceiling

On October 14, US President Joe Biden opted for a temporary deal to increase the country's debt ceiling to $480 billion, which as per Yellen, was expected to install a "high degree of confidence" and enable the Treasury Department to continue to fund federal operation through December 3. The move is assumed to buy time for the lawmakers to strike a more permanent deal to avoid being a defaulter. Notably, the US national debt limit is stipulated at $28.5 trillion but is moulded every year to fit the government spending.

Image: AP

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Published October 19th, 2021 at 18:11 IST

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