The US Department of Finance will take “extraordinary measures” as of January 21 to continue to meet its obligations regarding its debt maturities, announced Friday the outgoing Secretary of State of the Treasury, Janet Yellen.
In a letter addressed to key Congressional officials, Janet Yellen indicates that the debt ceiling, currently slightly above $36,000 billion, “does not authorize new spending.”
“Extraordinary measures” will therefore be taken starting January 21, the day after the inauguration of President-elect Donald Trump. These measures concern the cessation of payments to several pension funds and health or disability benefits for public employees, technical adjustments “which are not immediately necessary for the payment of pensions”.
“Retirees and public sector employees will not be affected by these actions,” it is still written. This type of measure makes it possible to avoid falling behind on the payment of invoices, which would penalize State suppliers and more generally the economy. They can only be temporary, while Congress raises or suspends the debt ceiling.
A probable debt of 118% of GDP in 2035
If parliamentarians fail to reach an agreement, the United States could ultimately find itself in default.
The increase, or suspension, of the debt ceiling is a recurring subject in the country, with 78 changes since 1960 – 49 times under a Republican president and 29 times under a Democratic president, according to the Treasury Department website.
-An official report published Friday anticipates that public debt will represent 118% of United States GDP in 2035, compared to 100% in 2025.
Donald Trump, who is due to take office on January 20, has reiterated his desire to continue reducing taxes while slashing federal government spending. He assures that the tax revenues from the additional customs duties that he wants to put in place will make it possible to rebalance the accounts.
ats/ther
Swiss
Related News :